Writing a Winning Offer
If Only It Were That Simple...
Wouldn’t it be nice if you could tour a house, shake hands with the seller, and say, “I’ll take it!” Unfortunately, that only happens in the movies. In real life, the offer process is one of the most intense parts of the home-buying roller coaster. Here’s how it all works:
The Offer Process
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Find Your Dream Home
Once you’ve found the one, notify your agent immediately so you can move quickly. -
Check the Comps
Your agent will review comparable homes (aka "comps") to ensure your offer is competitive and aligns with the home’s market value. -
Have Your Pre-Approval Letter Ready
Be sure to supply your pre-approval letter to your agent—it must be included with your offer to show the seller you're financially ready. -
Submit the Offer
Your agent will prepare the purchase agreement for you to review and sign. Once signed, they’ll submit it to the seller’s agent. -
Set a Deadline
Every offer includes a response deadline. In most cases, you’ll give the seller 24 hours to respond—sometimes less in a competitive market. -
Seller’s Response
The seller has three options:-
Accept the offer as is.
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Counter with different terms.
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Reject the offer entirely.
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Review and Strategize
If the seller counters, take time to review the terms with your agent and adjust your strategy if necessary. Try to stay firm on your priorities, but be open to adjustments where it makes sense. -
Agreement Reached!
Once you and the seller come to an agreement and the offer is accepted, the fun really begins! Touring homes and submitting the offer is only half the battle—you’re now on your way to the finish line!
Trust the Process: Writing an Offer
When it’s time to write your offer, trust your agent to guide you. By now, you’ve likely toured several homes and had multiple conversations with them about the process. Your agent should be able to answer your questions, offer strategic advice, and ensure your offer stands out.
One of the key steps your agent will take is running a quick CMA (Comparative Market Analysis) on the property to help determine a competitive and fair offer price.
Tips to Make Your Offer Stand Out
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Increase Your Earnest Money Deposit
Typically, earnest money is about 1% of the purchase price, but if you can put down more, it signals to the seller that you're serious. You can even write the check and send a picture of it with your offer to demonstrate your commitment. -
Be Flexible with Closing Dates
If you don’t need to move by a specific date, let the seller know you’re flexible. This allows the seller to align the closing date with their schedule rather than yours, which can make your offer more appealing. -
Use a Reputable Local Lender
A good local lender can make a big difference. Your agent should be able to recommend a few trusted lenders who are known for closing deals efficiently. -
Keep It Simple
Avoid overcomplicating your offer with requests for minor repairs, like a cracked light fixture. Save those for the inspection phase. Keeping your offer clean and straightforward can make it more attractive to the seller.
Within your offer, there are several contingencies that must be met before the sale can be finalized. The fewer contingencies, the better your offer will look to the seller. You will need contingencies to protect you in case something doesn't quite work out as planned.
Understanding Contingencies
Contingencies are conditions that must be met before the sale is finalized. While you need contingencies to protect yourself, fewer contingencies generally make your offer stronger. Here are some common contingencies to be aware of:
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Home Inspection
You’ll indicate in the offer whether you want a home inspection. If you do, you’ll need to specify a timeframe for the inspection and negotiate any repairs based on the results. -
Financing
This contingency protects you if your loan isn’t approved. If financing falls through, this clause allows you to back out of the deal without penalty. -
Sale of Your Current Home
If you need to sell your current home before buying, your offer will be contingent on that sale. In a competitive market, this contingency can make your offer less appealing to sellers. -
Appraisal
The appraisal must meet or exceed the purchase price for the bank to approve your loan. If the home appraises for less, you’ll need to renegotiate the terms with the seller. The bank won’t lend more than the home’s appraised value.
Rejection Happens—But Don’t Sweat It
Writing an offer can be exciting, but it’s important to stay level-headed. If your offer is rejected, it likely means one of two things: either someone else made a stronger offer, or the seller wasn’t comfortable with your contingencies.
The good news? There’s always another home out there, and the right one will come along.
If you have any specific questions about writing an offer on a home, please don't hesitate to contact me!