What Documents Do You Need to Put an Offer on a House?

Making an offer on a house is a significant step in the homebuying journey. It requires careful preparation beyond just finding a property. Gathering the necessary documents and understanding the terms involved streamlines the experience, positioning you as a serious and capable buyer. A well-prepared offer demonstrates your financial readiness and commitment, which can be advantageous to sellers evaluating multiple proposals.

Documents for Financial Readiness

Before drafting an offer, prospective buyers need to assemble financial evidence. This documentation demonstrates your ability to complete a home purchase. This is often done with your mortgage lender, ensuring you understand your purchasing power.

A mortgage pre-approval letter is an important document obtained from a lender. This letter indicates that a lender has reviewed your financial information, including credit history, income, and assets, and is willing to lend you a maximum amount. It outlines the anticipated purchase price, maximum loan amount, loan program (conventional, FHA, or VA), loan term, and interest rate. Unlike a pre-qualification, which is a preliminary estimate based on self-reported data, a pre-approval involves a detailed financial review and often a hard credit check. This letter is valid for 60 to 90 days.

In addition to the pre-approval letter, you will need to provide proof of funds. This verifies you have sufficient liquid assets to cover the down payment, closing costs, and any required reserves. Common forms of proof of funds include recent bank statements from checking or savings accounts, or statements from investment accounts that hold readily accessible funds.

For an all-cash offer, proof of funds must cover the entire purchase price. Some situations may require a formal letter from your bank stating the available funds. These documents assure sellers and lenders of your financial capability, helping to prevent delays in the transaction.

Key Information for Your Offer

Once your financial readiness is established, the next step involves determining the terms and details to include in the written purchase offer. This formal document, often a purchase agreement, outlines the proposed transaction and becomes legally binding upon acceptance. Carefully deciding on these components influences your offer’s attractiveness to a seller.

The offer price is a key component, reflecting the amount you are willing to pay for the property. This figure is determined based on market conditions, comparable home sales, and your budget.

Another key element is the earnest money deposit, which demonstrates your good faith and commitment. This deposit ranges from 1% to 3% of the home’s sale price, but can be higher, up to 5% or 10%, in competitive markets. The earnest money is held in an escrow account by a neutral third party, such as an escrow or title company, until closing. At closing, it is applied towards your down payment or closing costs.

The desired closing date is an important term to specify. This is the day ownership officially transfers, negotiated between buyer and seller. For offers involving a mortgage, the closing process takes 30 to 60 days from the offer acceptance date, allowing time for inspections, appraisal, and loan underwriting. Cash purchases can close faster, in as little as 10 to 14 days, as they do not involve a loan approval process.

Contingencies are clauses included in the offer that protect the buyer by allowing them to withdraw from the contract under specific conditions without forfeiting their earnest money. A financing contingency protects you if you are unable to secure the necessary mortgage loan. An appraisal contingency ensures that the property’s appraised value meets or exceeds the purchase price, safeguarding against overpaying. A home inspection contingency provides a period, often 7 to 10 days, for a professional inspection, allowing you to negotiate repairs or withdraw if significant issues are found. Less common but sometimes necessary is a sale of current home contingency, which makes the purchase dependent on the successful sale of your existing property.

Other details to include are:

• Specific loan type and down payment percentage.
• Any appliances or fixtures to be included or excluded from the sale.
• Your full legal name(s) as they will appear on formal documents.
• The property’s address and legal description.

Presenting Your Offer

With all the necessary financial documentation and offer terms meticulously prepared, the final step involves formally presenting your offer. This procedural action initiates the negotiation phase with the seller. Your real estate agent plays a central role in this process, acting as the intermediary.

The completed offer package, including the written purchase agreement and supporting financial documents like your mortgage pre-approval letter and proof of funds, is submitted by your real estate agent to the seller’s agent. This submission begins the seller’s review period. Sellers respond to offers within 24 to 48 hours, though this timeline can vary, especially with multiple offers.

Upon receiving your offer, the seller has several options. They can accept the offer as presented, formalizing the contract. Alternatively, they may reject the offer or, more commonly, issue a counter-offer.

A counter-offer indicates the seller’s willingness to negotiate, proposing changes to terms like price, closing date, or contingencies. Your agent facilitates these negotiations, working to reach a mutually agreeable contract. Once an agreement is reached and signed by both parties, the property is “under contract,” committing both buyer and seller to proceed towards closing.