You've toured dozens of homes, fallen in love with one, and you're ready to make it yours. Now comes the moment that transforms you from browser to buyer: writing the offer. This is where real estate becomes a negotiation, and how you structure your offer can mean the difference between getting the home and losing it to another buyer—or between protecting yourself and taking on unnecessary risk.
A purchase offer is a legal document that, once accepted, becomes a binding contract. Everything in it matters: the price, the timing, the conditions, and the smaller details that signal how serious you are and how easy you'll be to work with. Here's how to craft an offer that gets accepted while protecting your interests.
The Anatomy of a Strong Offer
Every offer starts with the purchase price—what you're proposing to pay for the home. This isn't about what the home is "worth" in some abstract sense; it's about what you're willing to pay given market conditions, competition, and how badly you want this particular property.
Your agent will help you analyze comparable sales—similar homes that have sold recently in the same area—to establish a reasonable range. But comparables are just a starting point. A home that's been sitting on the market for three months suggests room to negotiate below asking. A home with multiple showings scheduled and offers expected suggests you'll need to be more aggressive. In hot markets, winning offers often exceed the asking price; in slower markets, offers below asking are common and expected.
Your earnest money deposit signals your commitment. This money—typically 1% to 3% of the purchase price—goes into escrow when your offer is accepted and is credited toward your down payment at closing. A larger deposit tells the seller you're serious and have resources. If you walk away for reasons not covered by your contingencies, the seller typically keeps this money—so it's real commitment with real stakes.
Understanding Contingencies
Contingencies are conditions that must be met for the sale to proceed. They protect you by providing legitimate exit ramps if certain things don't go as expected. But every contingency you include gives the seller a reason to worry the deal might fall through—which is why reducing or limiting contingencies can strengthen your offer in competitive situations.
The inspection contingency gives you the right to have a professional inspection and negotiate repairs or credits based on the findings—or walk away entirely if you discover major problems. This is arguably the most important protection you have. Waiving it entirely is risky; consider instead limiting the scope (you'll only negotiate issues over a certain dollar threshold) or shortening the inspection period.
The financing contingency protects you if your mortgage approval falls through. If you can't get the loan, you can cancel the contract and recover your earnest money. Waiving this contingency is essentially saying you'll buy the home regardless of whether you can get financing—which makes sense only if you have cash backup or near-certain approval.
The appraisal contingency protects you if the home appraises for less than your offer price. Without this contingency, you'd need to cover the gap between appraised value and purchase price in cash. In competitive markets, buyers sometimes waive or modify this contingency—offering to cover a gap up to a certain amount.
A sale contingency makes your purchase dependent on selling your current home first. This is the weakest type of contingency from a seller's perspective—it introduces significant uncertainty. If you need to sell before you can buy, consider getting your home under contract first, or explore bridge loans that let you buy before selling.
Beyond Price: What Makes Offers Competitive
When sellers compare multiple offers, price matters—but it's not everything. A higher offer riddled with contingencies and a complicated timeline might be less attractive than a slightly lower offer that feels certain to close.
Flexibility on timing can be surprisingly powerful. If the seller needs a quick close (maybe they've already purchased their next home), offering a 21-day close instead of 45 days makes you more attractive. If they need extra time to move, offering a lease-back arrangement where they can rent from you after closing removes a major stress point.
Including a pre-approval letter is essential—it proves you can actually afford the home and have already been vetted by a lender. In competitive situations, some buyers go further by providing a letter from their lender indicating the loan is already in underwriting.
A personal letter to the sellers can help in some situations, though this is more controversial than it once was. Some sellers appreciate hearing why you love their home; others prefer purely business transactions. In some states, sellers' agents discourage letters due to fair housing concerns. Ask your agent whether a letter makes sense for your situation.
Escalation clauses let you automatically increase your offer if competing offers come in higher—up to a maximum you specify. For example: "I offer $400,000, but will beat any competing offer by $2,000 up to $425,000." These can be effective but also reveal your maximum willingness to pay.
The Negotiation Dance
Once you submit an offer, the seller has three options: accept, reject, or counter. A clean acceptance means you're under contract immediately. Rejection means back to the search (though you can always submit a revised offer). A counter starts a back-and-forth negotiation.
Counter offers might adjust price, modify contingencies, change the closing date, or alter other terms. Each counter expires after a specified period—often 24 to 48 hours—creating time pressure. Negotiations can go through multiple rounds of counters before reaching agreement or impasse.
Remember that everything is negotiable, not just price. Asking the seller to leave appliances, cover certain closing costs, or complete specific repairs before closing are all fair game. Sometimes a seller who won't budge on price will agree to other concessions that have similar value to you.
When your offer is accepted—what's called mutual acceptance—the contract becomes binding. Your earnest money is deposited, contingency timelines start, and the closing process begins. This is the moment when searching becomes buying.
Be cautious about waiving contingencies to win a bidding war. An inspection contingency protects you from buying a money pit. A financing contingency ensures you get your earnest money back if your loan falls through. Waiving these protections can be appropriate in certain situations, but understand exactly what you're risking before you do. Never let the heat of competition push you into commitments you'll regret.