How To Make An Offer On A House

Mon, Feb 12, 2024 at 6:24AM

How To Make An Offer On A House

How to Make an Offer on a House: 8 Easy Steps

Embarking on the journey of homeownership can be both exciting and daunting. The thrill of finally owning your dream home can be overshadowed by the complexity of how to make an offer on a house. But fear not, as we have broken down this process into 8 easy steps that will help you navigate the path to homeownership with confidence. So let’s dive in and unravel the mystery surrounding the art of making an offer, taking you one step closer to the keys to your dream home.

This blog post will guide you through the essential steps of how to make an offer on a house, from obtaining mortgage pre-approval to finalizing the contract with the seller. Our aim is to equip you with the knowledge and tools necessary to make informed decisions and successfully navigate the home buying process. By following these 8 easy steps, you will be well on your way to securing your dream home and making a wise investment for your future.

Short Summary

  • Obtain a mortgage pre-approval and work with a real estate agent to discover your ideal home.

  • Investigate the property’s background, understand the local market, and maintain your financial plan when making an offer.

  • Negotiate sale terms with the seller before finalizing and signing purchase agreement documents.

Step 1: Mortgage Pre-Approval

A person holding a pen and paper, preparing to make an offer on a house after completing how to make an offer on a house steps in Step 1: Mortgage Pre-Approval section.

Obtaining a mortgage pre-approval is the first and arguably the most crucial step in the home buying process. This involves evaluating your income and credit information to determine the purchase price you are qualified for with a mortgage loan. Mortgage pre-approval serves as your ticket to the world of house hunting, showing sellers that you are a serious buyer with a clear budget in mind.

To get pre-approved, you will need to provide your prospective lender with necessary income and credit information, as well as the projected purchase price you are considering. A pre-approval letter from your lender will demonstrate your financial capability to sellers, giving you an edge in the competitive market and helping your offer on a house stand out.

Remember, staying pre-approved throughout the buying process is essential to making a strong, competitive offer and ensuring a smooth closing.

Step 2: Discover Your Ideal Home

A couple looking at a house for sale

Finding your dream home requires patience and diligence. Reviewing listings, attending showings and working closely with a real estate agent will increase your chances of finding the perfect home that meets your needs and preferences. Your buyer’s agent, who is solely dedicated to representing your interests, will be your best ally in this process. They can help you navigate the local market, negotiate with the seller’s agent and guide you through the home buying process.

While searching for your ideal home, it’s crucial to determine if the property is within your budget. Consider the funds needed for a down payment and if the estimated monthly mortgage payment is affordable. By staying within your budget, you will ensure a smooth home buying process and avoid any unpleasant surprises during the closing process or beyond.

Step 3: Offer Price Calculation

A couple discussing the offer price of a house

Now that you have found your dream home, it’s time to determine the right offer price. This crucial step involves considering various factors such as the home’s background, the local market and comparable sales. Let’s explore these aspects in greater detail.

Investigate the Home's Background

Digging into the home’s background can give you valuable negotiation leverage. By researching public property records and real estate listings you can gain insight into the homeowner’s motivations for selling, the home’s history and potential issues that could be used to negotiate a lower price.

Understanding the home’s history and the seller’s circumstances will help you craft a well-informed and competitive offer.

Understand the Local Market and Comparable Sales

Your real estate agent can provide invaluable assistance in performing a comparative market analysis of the local housing market and recent comparable sales. This information can help you determine if the seller’s asking price is reasonable and guide you in formulating an offer based on market data.

A well-researched offer can not only lead to a better deal, but also increase the likelihood of the seller accepting your offer.

Maintain Your Financial Plan

While it’s tempting to stretch your budget to secure your dream home, it’s essential to remain within your financial limits and never offer more than you can comfortably afford. By sticking to your financial plan, you will ensure a smooth home buying process and avoid putting yourself in a precarious financial situation.

Stretching your budget too far can lead to financial hardship and stress.

Step 4: Earnest Money Proposal

A couple signing an earnest money proposal

Earnest money is a deposit made by the buyer to demonstrate their commitment to the purchase. Typically, earnest money amounts to 1-3% of the purchase price. This deposit acts as a sign of good faith, reassuring the seller that you are a serious buyer with the financial means to support the transaction.

An earnest money deposit is held in an escrow account until closing, at which point it is applied to the purchase price or returned to the buyer if the sale falls through due to contingencies not being met. By offering a reasonable earnest money deposit, you can strengthen your offer and increase your chances of securing your dream home.

Step 5: Contingency Considerations

A couple discussing contingency considerations

Contingencies are clauses in a purchase agreement that protect the buyer, allowing them to back out of the transaction without losing their earnest money or facing legal repercussions if certain conditions are not met. Common contingencies include:

  • Home inspection contingency

  • Appraisal contingency

  • Financing contingency

  • Home sale contingency

While including contingencies can safeguard your interests, it’s crucial to evaluate each contingency carefully, as fewer contingencies may make your offer more attractive to the seller.

However, waiving contingencies can also make your offer riskier as you may be faced with expensive repairs or forfeit your right to withdraw from the sale if your financing is not approved. It’s essential to consult with your real estate agent and consider the potential consequences before waiving contingencies in your offer.

Step 6: Draft Your Initial Offer

A couple drafting an initial offer

With all the necessary information gathered and decisions made, it’s time to collaborate with your real estate agent to draft a well-structured initial offer. Your agent will ensure the accuracy and completeness of your offer, adhering to local laws and regulations.

If your offer is far from the seller’s asking price, you may want to consider writing a letter. This could explain market conditions or comparative market analyses that have shaped your offer. This can help the seller understand your rationale and increase the chances of them accepting your purchase offer.

Step 7: Price and Sale Terms Negotiation

A couple negotiating the price and sale terms of a house

Once your initial offer is submitted, the negotiation process begins. The seller may accept your offer, decline it or make a counteroffer. It’s essential to be prepared for potential counteroffers and maintain open communication with your agent throughout the negotiation process, especially when the seller accepts your offer.

Let’s further discuss how to handle seller counteroffers.

Handling Seller Counteroffers

When faced with a seller’s counteroffer, you have three options: accept the counteroffer as-is, submit your own counteroffer or decline the counteroffer and explore other options.

Your real estate agent, who can also act as a seller’s agent, can provide valuable guidance throughout the negotiation process, ensuring you make informed decisions that align with your financial goals and home buying objectives.

Step 8: Contract Finalization and Signing

A couple signing a contract

Once you and the seller have reached an agreement, it’s time to finalize and sign the purchase and sale agreement. The final contract should include all agreed-upon terms and conditions, ensuring both parties are legally protected. With the contract signed, you can proceed with the mortgage lender, appraisal and home inspection processes, bringing you one step closer to owning your dream home.

Remember that even after the contract is signed, there are still responsibilities to fulfill, such as completing paperwork, making payments to various parties involved, including closing costs and adhering to the closing date stipulated in the contract. By staying diligent and organized throughout the home buying process, you can ensure a smooth and successful closing.


In conclusion, making an offer on a house is a multifaceted process that requires attention to detail, careful planning, and the guidance of an experienced real estate agent. By following these 8 easy steps, you can confidently navigate the home buying process and secure your dream home at a price you can comfortably afford.

The journey to homeownership may seem daunting at first, but with the right knowledge and tools, you are well-equipped to make informed decisions and ultimately achieve your goal of owning your dream home. So embark on this exciting adventure and unlock the door to your future.

Frequently Asked Questions

What is the correct way to make an offer on a house?

Decide how much to offer, consider contingencies, decide on earnest money, write an offer letter, and negotiate the price and terms of the sale to make an offer on a house.

When making an offer on a house, it is important to consider several factors. First, decide how much to offer. Consider any contingencies that may be necessary, such as a home inspection or financing. Decide on the amount of earnest money to put down.

What is the rule of thumb for making an offer on a house?

When making an offer on a house, aim for a lower price than the listing - typically between 5 and 10 percent of the home price. It’s important to research market prices beforehand to be aware of how much wiggle room there may be on the asking price and not to overcommit financially.

Doing research ahead of time can help you make an informed decision and get the best deal possible. Knowing the market prices and the seller’s motivation can help you make an offer that is both reasonable and attractive.

How do I make my offer stand out when buying a house?

To make your offer stand out, ensure the price is right, show proof of pre-qualification, offer more earnest money, waive certain contingencies, include an escalation clause, limit requests for extras, find out what’s important to the seller and craft your offer around that, keep your offer friendly. Start with your best offer, and consider designating some of your earnest money as non-refundable.

Cash is also a great way to make your offer stand out.

How do I get the highest offer on my house?

To get the highest offer on your house, it’s important to understand your local market, set the right price, and hire an experienced listing agent. Additionally, you should consider minor renovations that add value at minimal cost. Negotiate for the best offer, not just the highest offer.

What is the importance of obtaining mortgage pre-approval before house hunting?

Obtaining a mortgage pre-approval before house hunting is important as it shows sellers that you are a serious buyer with an established budget, making your offer more attractive and increasing your chances of success.

This can give you an edge over other buyers who may not have taken the time to get pre-approved. It also allows you to shop with confidence, knowing exactly how much you can afford and what type of loan you qualify for.

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