How to Make an Offer on a House: A Step-by-Step Guide to a Winning Bid

Making a competitive offer on a house requires more than just naming a price. A strong offer is a strategic package that includes a compelling price, carefully chosen contingencies, an earnest money deposit, and a clear timeline, all backed by a mortgage pre-approval. Based on our experience assessment, sellers typically respond by accepting, countering, or rejecting your proposal, making negotiation a key phase where your real estate agent's guidance is critical.

What Should You Do Before Writing an Offer?

Thorough preparation is the foundation of a successful home purchase. This phase involves financial readiness and deep market research.

1. Secure Mortgage Pre-Approval A mortgage pre-approval is a letter from a lender stating the loan amount you qualify for after verifying your financial documents. This is different from a pre-qualification, which is a preliminary estimate. Presenting a pre-approval letter with your offer signals to the seller that you are a serious, financially capable buyer, which can significantly strengthen your position.

2. Determine a Competitive Offer Price The best offer is not always the highest bid. It is one that reflects the home’s fair market value, determined by analyzing recent sales of comparable homes ("comps") in the neighborhood. A local real estate agent can provide invaluable insight into local market dynamics, whether it's a buyer's or seller's market, to help you arrive at a competitive and realistic price.

3. Decide on Key Contingencies Contingencies are clauses in a real estate contract that allow you to back out without penalty if specific conditions aren't met. Common contingencies include:

• Home Inspection Contingency: Protects you if the inspection reveals significant, unexpected repair issues.
• Appraisal Contingency: Ensures the home is valued at or above your offer price by a professional appraiser for the lender.
• Financing Contingency: Allows you to withdraw if you cannot secure a mortgage.

While crucial for buyer protection, the number of contingencies can impact your offer's attractiveness. According to a 2024 industry report, approximately 66% of buyers included a home inspection contingency, and 56% required mortgage approval. Your agent can advise on which contingencies are essential and which might be negotiated in a competitive market.

What Goes Into the Formal Offer Document?

Your real estate agent will help you draft a formal purchase agreement. This legally binding document should be precise and comprehensive, including:

• The property’s legal address and your full offer price.
• The amount of your earnest money deposit, which is a good-faith payment (typically 1-3% of the purchase price) held in escrow.
• A proposed closing date, usually 30 to 45 days from acceptance.
• A clear list of any contingencies and their timeframes.
• A request for any included items, such as appliances or window treatments.
• An offer expiration date to encourage a timely response.

Including a proof of funds letter from your bank alongside your pre-approval letter further bolsters your credibility.

What Happens After You Submit an Offer?

Once submitted, the seller has three options: accept, reject, or counter your offer.

If the seller issues a counter offer, they are proposing changes to your original terms, such as a higher price or a different closing date. This begins the negotiation phase. Your agent will guide you on whether to accept the new terms, submit a counter of your own, or walk away.

Upon mutual agreement, the home goes "under contract" or "pending." The subsequent steps include completing the home inspection, the lender's appraisal, and securing final mortgage approval. If all contingencies are satisfied, you will proceed to the closing table to finalize the purchase.

A successful offer balances a competitive price with clear, reasonable terms. Partnering with an experienced real estate agent is the most effective way to navigate this complex process and secure your dream home.