Making an offer on a house means proposing a purchase price along with the other terms under which you’re willing to buy the property. A typical offer can address earnest money, financing, contingencies, the closing date and even which appliances or other items stay with the home.
The process can move quickly. In a competitive market, you may have only a day or two to evaluate a property and prepare an offer, while negotiations themselves can range from a few hours to several days.
Key Takeaways
- An offer is more than a purchase price. Earnest money, contingencies, financing, closing timing and other terms can all affect how a seller evaluates it.
- Base your offer price on comparable sales, the home’s condition and current competition rather than asking price alone.
- Contingencies can protect you if financing, inspection, appraisal or another important part of the transaction doesn’t go as planned.
- A higher offer isn’t always the strongest offer. Sellers may also care about certainty, timing and the number of conditions attached to the purchase.
- Once an offer is accepted, contractual deadlines can begin quickly, so make sure you understand the agreement before signing it.
How Do You Make an Offer on a House?
Most buyers make a written offer with the help of a real estate agent, although you can also purchase a home without buyer representation. The offer identifies the property, your proposed price and the conditions under which you’re prepared to complete the purchase.
Before deciding on the terms, look at recent comparable sales, the property’s condition, how long it has been listed and whether other buyers are competing for it. Then decide which protections you want to keep and how much flexibility you have on price and timing.
If you’re still getting comfortable with the overall transaction, the step-by-step homebuying process shows where the offer fits between searching for a home and the inspection, financing and closing stages.
What Goes Into an Offer on a House?
Purchase contracts vary by state and transaction, but several terms commonly determine the substance of an offer.
| Offer term | What it means | Why it matters |
|---|---|---|
| Purchase price | How much you’re offering to pay for the property | Usually the most visible part of the offer, but not the only factor a seller considers |
| Earnest money | A good-faith deposit associated with the purchase agreement | Can demonstrate commitment and may be at risk depending on the contract |
| Financing terms | How you expect to fund the purchase | Helps the seller evaluate whether the transaction is likely to close |
| Contingencies | Conditions that must be satisfied for the transaction to proceed as written | Can protect you if financing, inspection, appraisal or another issue arises |
| Closing date | When you propose completing the transaction | A seller may prefer a date that fits their moving or purchase plans |
| Inclusions and exclusions | Items that stay with or are removed from the property | Clarifies treatment of appliances, fixtures or other property |
| Offer expiration | How long the seller has to respond | Prevents the offer from remaining open indefinitely |
Because the exact contract language determines your rights and obligations, read the offer carefully before signing it. Your agent or attorney, where applicable, can help explain the form being used in your transaction.
Step 1: Decide How Much to Offer
Your starting point should be the home’s market value, not simply the number in the listing.
Three factors matter most:
- Comparable sales: Look at similar nearby homes that sold recently, particularly those with comparable size, condition, location and features.
- Property condition: A home needing substantial work may justify a different price than a recently updated property, even if the homes look similar on paper.
- Competition: An offer strategy that works on a listing sitting for two months may not work on a home receiving several offers in its first weekend.
Also consider whether the price still fits your own finances. A seller’s willingness to accept your offer doesn’t make the payment affordable.
If you’re comparing several possible purchase prices, an income-needed calculator can help show how changing the home price affects the estimated income required under the assumptions you enter.
Should You Offer Below Asking Price?
You can, particularly when the home has been on the market for a while, needs work or comparable sales suggest the asking price is aggressive.
The risk is that another buyer may be willing to pay more. In a multiple-offer situation, an offer significantly below asking may receive little consideration unless other terms make it unusually attractive.
Should You Offer Above Asking Price?
An above-asking offer can make sense when recent sales support the price and competition is strong, but don’t increase your number simply because other buyers exist.
If you’re financing the purchase, remember that the appraisal could become relevant if the agreed price substantially exceeds the value supported by comparable properties.
Before settling on a number, it can also help to work through the questions to ask before making an offer, including what you know about the property, seller and local market.
Step 2: Decide How Much Earnest Money to Offer
Earnest money is a deposit showing that you’re serious about completing the purchase after you and the seller enter into a contract.
There isn’t one amount that applies to every transaction. Local customs, purchase price and competition can all influence the amount a buyer offers.
The deposit is generally held according to the purchase agreement rather than simply handed over to the seller for immediate use. Depending on the transaction, that could mean an escrow agent, title company, brokerage, attorney or another designated holder.
If the purchase closes, earnest money is typically credited toward amounts you owe in the transaction. If the contract ends before closing, whether you receive it back depends on the agreement and why the transaction ended.
That makes the contract more important than any rule of thumb about deposit size. Our guide to earnest money deposits explains who may hold the money, when buyers can get it back and when it may be forfeited.
Step 3: Choose Your Contingencies
A contingency makes the purchase dependent on a specified condition or event.
Common examples include:
- Financing contingency: Addresses what happens if you cannot obtain the financing required by the contract.
- Inspection contingency: Can provide rights related to inspecting the property and responding to significant findings.
- Appraisal contingency: Addresses what happens if the property’s appraised value doesn’t support the agreed purchase price.
- Title contingency: Can address problems discovered with ownership or title.
- Home-sale contingency: Makes the purchase dependent on the buyer selling another property.
The exact protections depend on the language in your contract. CFPB recommends considering financing and satisfactory-inspection contingencies when preparing a purchase offer.
Our guide to real estate contingencies goes deeper into how the major types work and what can happen when their conditions aren’t satisfied.
Should You Waive a Contingency?
Waiving a contingency can remove uncertainty for the seller, which may make an offer more competitive. It can also remove protection for you.
For example, reducing inspection protections could limit your options if you later discover an expensive problem. Removing an appraisal protection could create additional risk if the appraisal comes in below the purchase price.
Don’t treat waived contingencies as free ways to strengthen an offer. Understand the specific financial and contractual exposure you’re accepting first.
Step 4: Choose a Closing Date and Other Terms
Price may get the most attention, but a seller can have priorities that make other terms valuable.
A seller who has already moved might favor a relatively fast closing. Someone still searching for their next home may prefer more time. In some transactions, flexibility on possession can matter almost as much as a small difference in price.
Your offer should also clarify which items are included in the purchase. Permanently attached fixtures generally receive different treatment from personal property, but disagreements can arise over refrigerators, washers and dryers, outdoor equipment, window treatments and other items.
If an item matters to you, make sure the contract addresses it rather than relying on an assumption about what will be left behind.
Step 5: Consider Whether an Escalation Clause Makes Sense
An escalation clause is designed to increase your offer automatically if the seller receives a competing offer, usually up to a maximum amount you set.
For example, you might offer $400,000 with a provision increasing your price by $2,000 above a qualifying competing offer, up to a maximum of $420,000.
The idea is to avoid immediately bidding your maximum while remaining competitive if someone else offers more.
Escalation clauses aren’t appropriate in every transaction, and sellers don’t have to accept them. The contract also needs to make clear what qualifies as a competing offer, how the escalation is documented and what your maximum price will be.
There is another practical issue: by disclosing your ceiling, you’re telling the seller how much you may be willing to pay. In some situations, the seller may simply counter closer to that maximum instead.
Step 6: Submit the Offer
Once the price and terms are set, the written offer is delivered to the seller or seller’s representative.
Offers commonly include an expiration time. A shorter window can prevent your offer from remaining unresolved while other properties sell, but an unnecessarily tight deadline may also make it harder for the seller to consider the proposal.
If the listing already has a contingent or pending status, the situation becomes more complicated. A seller may still be willing to consider a backup offer depending on the existing contract and local practice.
You can read more about making an offer on a contingent home and whether a pending sale means it’s too late to make an offer.
What Happens After You Make an Offer?
A seller can generally accept the offer, reject it, counter it or allow it to expire. If several buyers are competing, the seller may also ask some or all of them for revised terms.
| What happens | What it means for you | Typical next step |
|---|---|---|
| Seller accepts | The parties proceed under the signed purchase agreement | Meet earnest-money and contingency deadlines and begin the under-contract process |
| Seller rejects | Your offer isn’t accepted | Decide whether to pursue another property |
| Seller counters | The seller proposes different terms | Accept, reject or respond with another proposal |
| Seller requests highest and best | Multiple buyers may be given a chance to improve their offers | Decide your maximum price and strongest acceptable terms |
| Offer expires | The response deadline passes without acceptance | Determine whether you still want to negotiate |
A counteroffer in real estate can change the price, closing date, contingencies or virtually any other negotiable term, so compare the entire counter rather than looking only at the dollar amount.
How Long Does It Take a Seller to Respond to an Offer?
There is no universal response time. The deadline written into the offer, local practice and the seller’s strategy all matter.
| Point in the process | What happens | Possible timing |
|---|---|---|
| Offer preparation | Buyer and agent finalize price and terms | Often hours to a day |
| Offer submitted | Seller reviews the proposal | Could be the same day or over several days |
| Negotiation | One or both parties propose revised terms | Hours to several days |
| Acceptance | Both sides agree to the contract | Deadlines may begin immediately after acceptance |
Some sellers respond almost immediately. Others intentionally collect offers until a stated review date. Ask whether the listing has an offer deadline so you know whether a slower response is expected.
What If There Are Multiple Offers?
Multiple offers don’t automatically mean you should bid as high as possible or remove every protection.
Instead, decide the strongest offer you’re willing to make before you know what competing buyers have offered.
That could involve:
- Increasing the price while staying within your budget.
- Increasing earnest money when you’re comfortable with the contract protections.
- Offering a closing date that works well for the seller.
- Reducing unnecessary conditions.
- Using an escalation clause where appropriate.
- Providing strong evidence that your financing is ready to move forward.
The goal isn’t simply to win. It’s to win on terms you’re still comfortable with after the competition disappears.
Should You Write a Letter to the Seller?
A personal letter to the seller, sometimes called a buyer love letter, may sound like a harmless way to distinguish your offer. It can create fair-housing concerns, however, particularly when the letter reveals personal information connected to characteristics protected by federal or state housing laws.
The federal Fair Housing Act prohibits housing discrimination based on race, color, national origin, religion, sex, familial status and disability. A letter that discusses family composition, religion or other personal characteristics can introduce information that shouldn’t influence the seller’s decision.
Some agents and brokerages therefore discourage personal offer letters altogether.
If you’re considering one, first read about the risks and alternatives to a homebuyer offer letter. Strong price and contract terms are generally a cleaner way to make your offer competitive.
What Makes a Strong Offer on a House?
A strong offer balances what matters to the seller with the amount of risk you’re willing to accept.
In some transactions, that means the highest price. In others, a slightly lower offer may be attractive because the buyer has stronger financing, a convenient closing date or fewer uncertainties.
Focus on five things:
- A price supported by the property and local market.
- Financing you are reasonably prepared to complete.
- Earnest money appropriate for your market and risk tolerance.
- Contingencies that protect the issues you aren’t willing to absorb yourself.
- Timing that works for you and, when possible, for the seller.
Trying to make every term maximally aggressive can create a contract you’re uncomfortable living with after acceptance.
Can You Change Your Offer After Submitting It?
Whether and how you can change or withdraw an offer depends on its status and the applicable contract rules.
Before acceptance, your options may differ from what they are after both parties have entered into a binding agreement. Once you’re under contract, your rights to terminate or renegotiate generally depend on the agreement, applicable law and circumstances such as a contingency.
That is why it’s better to resolve major questions before submitting the offer rather than planning to fix them afterward.
What Happens Once Your Offer Is Accepted?
Acceptance shifts the transaction from negotiation into execution.
Review the final signed agreement and immediately identify every deadline. Depending on the contract, you may need to deliver earnest money, apply for or continue financing, schedule an inspection, complete other due diligence and respond to title or appraisal issues within specific windows.
The home inspection is one of the first major steps for many buyers after reaching an agreement with the seller.
From there, the transaction progresses through financing, appraisal, title work, insurance and ultimately closing.
Bottom Line
Making an offer on a house is a negotiation over price and risk.
Start with comparable sales, the property’s condition and the amount of competition. Then decide what you’ll offer, how much earnest money you’re comfortable providing, which contingencies you want and what timing works for you.
A winning offer isn’t necessarily the highest one. It’s an offer the seller is willing to accept without requiring you to take on a price, payment or contractual risk you aren’t comfortable carrying.
FAQ
How do you make an offer on a house?
You typically submit a written purchase offer stating your proposed price and other terms, including earnest money, financing, contingencies and a proposed closing date. A seller can accept it, reject it or propose different terms.
How much should you offer on a house?
Base the amount on recent comparable sales, the home’s condition, current market competition and your own budget. Asking price provides context but doesn’t determine what the property is worth or what you should pay.
Can you offer less than the asking price?
Yes. An offer below asking may make sense when comparable sales support a lower value, the property needs work or the listing has been sitting without strong demand. The likelihood of acceptance depends on the seller and competing offers.
Can you offer more than the asking price?
Yes. Buyers sometimes offer above asking when competition is strong, but the price should still fit their finances and account for appraisal risk when financing is involved.
How long does a seller have to respond to an offer?
There isn’t one universal deadline. An offer may include an expiration time, and sellers may also announce a particular date for reviewing offers.
Do you need earnest money to make an offer?
Earnest-money requirements vary by contract and market. When used, earnest money is a good-faith deposit associated with the purchase agreement and may later be credited toward the transaction.
Should you waive the home inspection to win a house?
Waiving inspection protections can make an offer more attractive to a seller, but it can also expose you to substantial property-condition risk. Understand exactly which rights you’re giving up before agreeing to do so.
What happens after a seller accepts your offer?
The transaction moves into the under-contract period. Depending on the agreement, you may need to provide earnest money, complete inspections and financing requirements, address appraisal or title issues and prepare for closing within specified deadlines.
