How to Make a Real Estate Offer and Get It Accepted

Making a real estate offer is a key step in buying a home. This offer, formally presented as a purchase agreement, is a legally binding document outlining the terms and conditions under which a buyer proposes to purchase a property. Understanding its components and the process is important for prospective homeowners. Preparation ensures the offer accurately reflects the buyer’s intentions and financial capabilities.

Understanding the Key Elements of an Offer

An offer includes components defining the transaction. The offer price represents the amount a buyer is willing to pay for the property. This figure is central to negotiation.

Earnest money, a good faith deposit, demonstrates serious buyer intent. This sum, 1% to 3% of the purchase price, is held in escrow and applied towards the down payment or closing costs if the sale closes.

Contingencies allow a buyer to withdraw from the contract without penalty if conditions are not met. Common contingencies include:
Financing contingency: Makes the purchase dependent on the buyer securing a mortgage.
Inspection contingency: Allows the buyer to have the home professionally inspected and potentially renegotiate terms or cancel the contract based on findings.
Appraisal contingency: Protects the buyer if the property appraises for less than the agreed-upon purchase price, as lenders typically only loan up to the appraised value.
Sale of prior home contingency: Makes the purchase dependent on the buyer selling their current residence.

The closing date specifies the ownership transfer date. Financing terms detail payment methods: cash, conventional, FHA, or VA loans. Inclusions and exclusions list items part of the sale (e.g., appliances, fixtures) and those that are not. Other terms include specific repair requests or the desired possession date.

Getting Ready to Make Your Offer

Before drafting an offer, preparation strengthens a buyer’s position. Financial preparation begins with mortgage pre-approval, where a lender determines the maximum loan amount. The pre-approval letter provides a clear budget, demonstrates financial credibility to sellers, and can accelerate the home-buying process.

Market research focuses on understanding comparable sales (“comps”) by analyzing recent sales prices of similar homes to determine a competitive offer price. Understanding local market conditions, such as whether it is a buyer’s or seller’s market, also influences the offer strategy.

Property assessment involves reviewing disclosures and current condition, including information from the seller regarding history or known defects. Based on this research and personal financial situation, the buyer determines their specific offer strategy, including the proposed offer price, earnest money amount, and which contingencies to include or waive. Assembling a team with a real estate agent, and possibly a mortgage lender or attorney, provides expert guidance.

Crafting and Presenting Your Offer

The offer is drafted using a standard purchase agreement form, which varies by state or local practice. This document incorporates terms decided during preparation: offer price, earnest money, contingencies, and closing date. The information is entered into the designated sections of the agreement.

Additional forms (riders, addendums) and disclosures may attach to the main purchase agreement. Examples include lead-based paint disclosures for older homes or specific riders for unique property conditions. Before signing, review the entire document to ensure all details are accurate and reflect agreed-upon terms. A real estate agent assists in this review process.

The complete offer package includes the signed purchase agreement, supporting documents like the mortgage pre-approval letter and proof of funds for the earnest money deposit. This package is then formally submitted to the seller or their agent. Presentation can occur electronically or in person, depending on common practice and the preferences of the parties involved.

Navigating the Offer Process

Once an offer is submitted, the seller has several response options: acceptance, rejection, or a counter-offer. Acceptance means the seller agrees to all terms, leading to the opening of escrow and the deposit of earnest money. Rejection means the seller declines the offer outright.

A counter-offer indicates the seller agrees to some terms but proposes changes to others, such as the price, closing date, or contingencies. The buyer can then accept, reject, or make a counter-counter-offer, continuing negotiation until both parties reach an agreement or terminate discussions. Sellers typically respond within 24 to 72 hours, though this can vary.

Upon acceptance, the transaction moves into escrow, where contingencies are fulfilled. The inspection contingency period usually ranges from 7 to 10 days, allowing the buyer to conduct a home inspection and address any issues. The appraisal contingency typically has a timeline of 17 to 20 days, during which the property is appraised to ensure its value supports the loan amount. The financing contingency, allowing time for final loan approval, can last between 20 to 60 days.

If contingencies are not met, the buyer may have the right to withdraw from the contract and potentially recover their earnest money. The final steps to closing involve a final walk-through of the property to ensure its condition, followed by signing closing documents and the transfer of ownership.