Making an offer on a home is one of the most exciting—and nerve-wracking—steps in the homebuying journey. It’s the point where interest becomes action, and your path to homeownership gets very real. But crafting a strong, well-informed offer takes more than simply picking a number and crossing your fingers.
At this stage, your real estate agent plays a critical role. From understanding local market conditions to negotiating favorable terms, they’ll help you present an offer that stands out while protecting your interests. In this blog, we’ll walk you through every element of the offer process so you can feel confident and prepared when the right home comes along.
Understanding the Local Market
Before you decide how much to offer on a home, it’s essential to understand the market you’re buying into. Is it a seller’s market with lots of competition and limited inventory? Or a buyer’s market with more room to negotiate?
Your agent will conduct a comparative market analysis (CMA) to assess recent sales of similar homes in the area, also known as “comps.” This helps determine a fair and competitive offer price that aligns with your budget and market realities.
In competitive markets, buyers may need to offer at or above asking price—or sweeten their offer with fewer contingencies or flexible terms. In slower markets, you might have more leverage to negotiate on price, closing costs, or repairs.
Key Components of an Offer
A purchase offer includes much more than just your proposed price. It’s a legally binding document that outlines the terms of the sale and sets the stage for the transaction. Here are the core elements that typically make up a real estate offer:
Purchase Price
This is the amount you’re willing to pay for the home. It should reflect both your budget and the home’s fair market value, based on your agent’s guidance. Offering too low can risk losing the home to a stronger bidder, while offering too high without justification could lead to appraisal issues later.
Earnest Money Deposit
This is a good-faith deposit that shows the seller you’re serious about buying the home. It’s usually 1–3% of the purchase price and is held in escrow. If the deal goes through, it’s applied toward your down payment or closing costs. If you back out for a reason not covered by contingencies, you could lose this deposit.
Contingencies
These are conditions that must be met for the sale to proceed. Common contingencies include:
- Financing contingency – Allows you to cancel the contract if you can’t secure a loan.
- Inspection contingency – Gives you the right to inspect the property and negotiate or walk away if major issues arise.
- Appraisal contingency – Protects you if the home is appraised for less than the offer price.
- Home sale contingency – Lets you proceed with the purchase only if your current home sells first (used less frequently in competitive markets).
Contingencies are there to protect you, but in hot markets, sellers may favor offers with fewer strings attached. Your agent will help you decide what’s appropriate for your situation.
Closing Date
Your offer should include a proposed closing date, typically 30–45 days from acceptance, depending on financing and other factors. Flexibility here can sometimes help win over a seller who needs more time or wants to close quickly.
The Role of Your Agent in Crafting an Offer
Your real estate agent is your advocate and strategist when it comes to writing a compelling offer. While you bring the budget and goals, your agent brings the market knowledge, negotiation experience, and legal insight needed to structure a strong proposal.
A skilled agent will:
- Evaluate the home’s listing history and seller motivation (e.g., have there been recent price drops or long time on market?).
- Review comparable home sales in the neighborhood.
- Suggest offer strategies tailored to the current market—such as escalation clauses, flexible timelines, or covering part of the seller’s closing costs.
- Guide you in deciding which contingencies are necessary and which might be waived (when appropriate) to make your offer more attractive.
In multiple-offer situations, your agent’s experience can be a huge asset. They’ll help you stay competitive without overextending yourself, and they’ll present your offer professionally to give it the best possible chance of being accepted.
Submitting the Offer
Once your offer is finalized, your agent will submit it to the seller’s listing agent, usually via a formal written purchase agreement. From there, the waiting game begins—but your agent will keep things moving and communicate updates along the way.
There are three possible outcomes once your offer is submitted:
- Acceptance: The seller agrees to your terms, and the home moves into the pending phase.
- Rejection: The seller declines your offer outright. In this case, your agent can help you reassess or move on to other properties.
- Counteroffer: The seller may adjust some terms—such as the price, closing date, or contingencies—and send back a counteroffer. Your agent will help you review and respond accordingly, potentially starting a short negotiation process.
Negotiation is common and doesn’t mean a deal is falling apart. With the right support, you can often find common ground and move forward with an agreement that works for both parties.
What Happens After an Accepted Offer
Once your offer is accepted, congratulations—you’re under contract! But there’s still a lot to do before you get the keys.
Here’s what typically happens next:
- Earnest money is deposited into an escrow account.
- Inspections are scheduled, giving you the chance to assess the home’s condition.
- Your mortgage lender begins the appraisal and underwriting process to finalize your financing.
- Title work and legal paperwork are reviewed to ensure there are no ownership or lien issues.
This phase is often referred to as “under contract” or “pending.” It’s where many of the behind-the-scenes details come together—and where your agent continues to guide and advocate for you.
Tips for Making a Competitive Offer
In today’s real estate market, especially in high-demand areas, it’s not uncommon for homes to receive multiple offers. To help yours stand out, consider these expert strategies:
- Get pre-approved for a mortgage before house hunting. A pre-approval letter strengthens your offer and shows sellers you’re financially ready.
- Be flexible with your terms. If you can accommodate the seller’s preferred closing date or waive minor repairs, your offer may rise to the top.
- Limit contingencies to the essentials. While it’s important to protect yourself, waiving non-critical contingencies can appeal to sellers—just make sure you understand the risks.
- Offer a larger earnest money deposit. This shows strong commitment and gives the seller added peace of mind.
- Include a personal letter (optional). In some cases, a brief letter introducing yourself and explaining why you love the home can create an emotional connection with the seller—though this strategy is used less frequently today and should be considered on a case-by-case basis.
Your agent will help tailor your approach based on the local market and the specific property.
Common Mistakes to Avoid
Making an offer is exciting, but it’s also a moment to proceed with caution. Here are some buyer pitfalls to avoid:
- Letting emotions override strategy. Falling in love with a home can lead to overbidding or ignoring red flags. Stay grounded with your budget and priorities.
- Skipping the inspection. Even in competitive markets, waiving an inspection without careful thought can lead to costly surprises later.
- Delaying your response. In a fast-moving market, hesitation can cost you the deal. Work closely with your agent to act quickly when necessary.
- Not understanding the fine print. Every offer includes legal and financial terms. Be sure you understand timelines, contingencies, and what happens if either party defaults.
Avoiding these missteps will help ensure a smoother transaction—and better peace of mind.
Conclusion
Making an offer on a home is more than just picking a number—it’s a carefully crafted move that requires market knowledge, strategic thinking, and strong negotiation. With the right agent by your side and a clear understanding of each step, you can submit an offer that’s competitive, realistic, and aligned with your goals.
If you’re ready to start your home search or want expert guidance through the offer process, the Kenmore Team is here to help.