How to Write an Offer Letter for a House

An offer letter for a house is a formal, legally significant document outlining a buyer’s terms for purchasing a property. It serves as an initial step in negotiating a home acquisition, communicating the buyer’s intent and proposed conditions to the seller. This document is a contractual proposal, formalizing the buyer’s interest and setting the stage for a potential sale.

Essential Information for Your Offer

Before drafting an offer letter, buyers must gather specific information. This includes the full legal names of all individuals on the title, their current address, and contact details such as phone numbers and email addresses.

Property details require the exact street address and, if available, its legal description. The offer price is the amount the buyer proposes to pay for the property. This figure should reflect market conditions and the buyer’s financial capacity.

An earnest money deposit, demonstrating the buyer’s commitment, needs to be determined. This deposit, typically ranging from 1% to 3% of the purchase price, signifies good faith and is usually held in escrow by a neutral third party, such as a title company or real estate broker.

Financing details require specification of the loan type (e.g., conventional, FHA, VA, or a cash offer), the loan amount, and the percentage of the down payment. A pre-approval or pre-qualification letter from a lender strengthens the offer by demonstrating financial capability.

The desired closing date should be included. Buyers must also decide on inclusions and exclusions for the sale. This list should detail items expected to convey with the property, such as appliances, window treatments, or light fixtures, and any items the seller intends to remove.

Common contingencies are conditions that must be met for the contract to proceed. These can include a satisfactory home inspection, an appraisal at or above the offer price, the buyer securing financing, or the sale of the buyer’s current home. Contingencies allow withdrawal without penalty, often with earnest money return. An offer expiration date and time must be set.

Components of a Purchase Offer Letter

The letter begins with an introduction addressing the seller and identifying the buyer(s) and, if known, the seller(s), along with the property address. This section establishes the parties involved and the subject of the transaction.

The proposed purchase price must be stated, often in both numerical and written form. Earnest money details are outlined, specifying the amount, method of payment (e.g., wire transfer or check), and the entity holding funds in escrow until closing. This demonstrates the buyer’s financial commitment.

Financing terms detail the acquisition method, such as a conventional mortgage or cash purchase, and the down payment. If financing, the letter should confirm a pre-approval letter from a lender is attached, reinforcing the buyer’s financial readiness. Contingencies are clauses stating the conditions under which the buyer can withdraw without penalty. For instance, an inspection contingency might read “subject to a satisfactory home inspection,” allowing the buyer to request repairs or terminate if issues are found. An appraisal contingency specifies the sale is “contingent upon appraisal at or above the offer price.”

The proposed closing date is stated, along with the desired date of possession, which indicates when the buyer expects to take occupancy of the property. A list of inclusions and exclusions itemizes personal property or fixtures that will convey with the sale or be removed by the seller. The offer expiration specifies the date and time after which the offer is no longer valid. The letter requires the signatures of all buyers, along with the date, to legally bind the offer.

Submitting and Following Up on Your Offer

The offer letter is submitted to the seller. This process is facilitated through real estate agents, with the buyer’s agent transmitting the offer to the seller’s agent. The submission package includes the offer letter, the buyer’s pre-approval letter from a lender, and any state-specific purchase agreement forms or disclosure forms. A complete submission package helps streamline the initial stages of negotiation.

After submission, communication flows between real estate agents. Sellers can accept the offer as presented, reject it outright, or issue a counter-offer. A counter-offer indicates the seller’s willingness to proceed but with proposed changes to terms, such as price, closing date, or contingencies.

While there is no universal legal deadline for a seller to respond, common practice suggests a response within 24 to 72 hours. The offer’s specified expiration date means it becomes void if not accepted or countered by this time. If a counter-offer is received, the buyer can accept the revised terms, reject them, or issue a counter-counter offer, continuing negotiation until both parties reach a mutually agreeable contract. This can involve adjustments to various terms.