How to Make an Offer on A House

October 10, 2019
5 min read

3 Pieces of Advice When Making an Offer on A House

Buying a home is an exciting milestone, an investment, and often, a major stressor. The fun part is looking for a new home. The stress comes in when you are ready to make an offer. How much do you offer? What terms do you want to negotiate? How do you make sure you’re protected? Do you need to sell your existing home first?

The good news is buying and selling property can be easier and less stressful than you think. You just need to know a few ways to make sure your offer is one that will put you in the best position. Here are three pieces of advice that will save you money, risk and headaches.

Get It In Writing

When you’re searching for a home, you may know the homeowner already or have the opportunity to meet them. Your real estate agent may also have spoken with them or their agent about certain items relating to an offer. In these situations, it’s not uncommon for terms to be discussed. Maybe they tell you they will lower the price by a certain number if you agree to close by a certain date or make an all-cash offer. Or, maybe something is discussed about appliances conveying with the house. While these conversations are completely acceptable, they aren’t enough.

Oral agreements and promises are not legally binding in real estate transactions. Anything you think was agreed to in a conversation, over email or any other form of communication should be included in your offer. Your written offer is the only legally-binding agreement and if your terms are not in there, they aren’t considered legitimate. If for some reason the seller backtracks on anything they agreed to in conversation, they have the right to decline all or part of your written offer or negotiate those terms. On the other hand, once they sign the written offer, all of the terms in your offer are now enforceable by law.

Use an Approved Offer Document

Whether you enlist the help of a licensed real estate agent or not, your offer needs to conform to state and local laws. You can’t simply send an email or write up your own offer. Your agent will have this document as standard fare, but if you decide not to use an agent, you can find plenty of templates online. No matter which route you take, the document will detail what you’re offering to pay, plus any contingencies and terms. Remember, if you’ve negotiated anything with the seller, you’ll want to include those stipulations as well.

Consider Making an All-Cash Offer

One of the best ways to win a bid on a house is to offer cash. All-cash offers are more attractive to home sellers because they come with less risk and close much faster than offers tied to a mortgage. Most mortgage-backed offers come with the contingency that the home buyer must secure financing before they will actually purchase the home. The home seller has to wait for the approval process and hope there are no issues, otherwise, they have to start over and put their home back on the market. Because there are no mortgage contingencies or bank approvals to deal with, all-cash offers close faster, often within a couple of weeks or less – that means fewer showings, fewer potential issues and faster moves.

Not everyone has cash readily accessible to make an all-cash offer. In these situations, your best bet is to use someone else’s cash. Homeward, for instance, is a company that offers clients access to their capital to make an all-cash offer on a house. You pay a 1.9 percent fee to do so (which is rolled into the purchase price of your home), but then you can save up to 5 percent because sellers are often willing to lower their asking price when they receive an all-cash offer. How do we do this? We evaluate your existing home during our approval process and give you credit for your home equity in advance. It’s a great way to not only make an attractive offer on a house but to be able to make that offer before you sell your existing home.

What’s in the Offer?

Now that you’re ready to make an offer, let’s go over exactly what needs to be in your offer. According to, when your purchase offer is accepted, it becomes a binding sales contract, so it’s important to have the following items in your offer:

  • Address and legal description of property
  • Sale price
  • Terms (is it an all-cash offer or contingent upon mortgage approval?)
  • Seller’s promise to provide clear title
  • Target closing date
  • Earnest money deposit and type of payment
  • Method by which taxes and utility bills are to be adjusted between parties
  • Provisions about who pays for title insurance, survey, etc.
  • Type of deed that will be granted
  • Any state requirements
  • An offer time limit
  • All contingencies


When it comes to real estate transactions, the first thing most people think about is the price. How do you make a fair offer? If you offer too low, you can risk offending the seller. If you offer too high, you may get the house but will have overspent. There is a sweet spot, but it’s not always easy to find.

If you work with a real estate agent, he or she will help you determine what price you should offer to pay, otherwise, you’ll have to determine it yourself. Either way, the go-to method is to look at comparables (a.k.a. “comps”). These are the prices of similar properties that have recently sold in your area. You may not be able to do a perfect apples-to-apples comparison since every property is unique, but you can at least look at:

  • Age of home
  • House square footage
  • Price per square foot
  • Number of bedrooms, bathrooms and living areas
  • Property size
  • Amenities (such as pool, office, 2-car garage or larger, etc.)
  • Updates (particularly kitchen and master bathroom)

For instance, if a home was built in the 1980s and hasn’t been updated since, you can’t fairly price that home based on an updated, larger one. Try to find sold homes that are as close as possible to the home you want to buy. This isn’t perfect math. It’s getting to a number that is fair.


Contingencies are likely the next thing most people think about with their offer. Will you need financing? Will you need to sell your home first before you can buy? Do you want to be sure the home you want to buy passes inspection before you buy? All of these issues can be addressed with contingencies.

Contingencies need to be spelled out in your offer. The seller needs to know how you plan to pay and you need to know whether the home you’re making an offer on is in good condition. Yes, the seller is obligated to disclose any known issues with the home, such as roof damage, leaks or foundation issues, but only through a third-party inspection will you find out the extent of damages, needed repairs or items that are not up to code. The homeowner may not be aware of these issues, but you want to be sure you are.

While you may not want to bypass the inspection contingency, you can greatly improve your bargaining position if you can forego the home sale and mortgage financing contingencies. As stated earlier, these contingencies bring risk into the equation for the seller. All-cash offers are the best way to avoid both. Even if you get pre-approved for a mortgage, you’ll still want to keep the mortgage contingency in your contract because you might not ultimately qualify for, and get, your mortgage financing. For example, if you lose your job or your credit changes before your new home sale closes, the mortgage company may deny your application.

With these tips in hand, you’ll be ready to make an offer on a house and hopefully even enjoy the process.

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