How to Make an Offer on a Home


You found your dream home, but now what? How do you make an offer on a home you want more than anything? Before you jump in with the highest bid possible, learn the simple steps to make a solid offer on a home.


Have a Pre-Approval Letter


Before you even look at homes, we highly suggest that you get pre-approved for a mortgage. The pre-approval letter will do two things:


  • Help you know what you can afford
  • Show the seller that you are serious and capable of paying the price you bid

What’s the Right Price?


Once you have your pre-approval and you’ve found your dream home, it begs the question ‘How much should I offer?’ First, take a step back. Don’t just dive in and make a bid. Find out the following information first:


  • How many days has the home been on the market?
  • Is it a buyer’s or seller’s market? 
  • What’s the home’s condition?
  • Is the seller in a rush to sell?
  • Are you in a bidding war?
  • Do you need financial assistance from the seller?
  • Will you ask for a financing, appraisal, inspection, or sale of home contingency?

All of these factors play a role. For example, if a home’s been on the market a long time, the seller may be more willing to negotiate the price. If it’s a seller’s market (high demand and low supply), sellers have the upper hand and may want a higher price. If you need seller assistance, whether financially or by adding contingencies, you may want to bid a little higher.


Bidding Strategies


Before you use one of the following bidding strategies, do your due diligence. Find out what other homes in the area sold for recently. Your real estate agent should be able to provide this information. If you are working solo, contact a reputable appraiser or even check sales prices online on sites like Zillow. Sales prices are public information, so you should be able to find the information easily. Make sure you look at homes of similar size, features, and within a mile of the subject home for a good comparison. 


  • Below Price Bidding – Use this strategy when you are in a buyer’s market (low demand and high supply), the home’s been on the market a long time, or the home has functional or cosmetic issues. It’s not a low-ball offer, but rather an offer to get the home sold.
  • Full Price – This strategy is useful in a seller’s market, especially if there’s a lot of competition. Sellers know they can get what the home’s worth and they will often hold out to get it.
  •  Highest and Best – In a bidding war, sellers sometimes simplify things. They ask for each bidder’s ‘highest and best’ offer. This is your last chance to outbid other bidders. This doesn’t mean just the financial part of the bid, though. Sellers look at what you are asking for too. If your offer is too demanding, they may opt for a lesser dollar amount with fewer demands.

Be careful if you get caught in a bidding war. Don’t get caught up in the emotions and continue bidding prices you can’t pay. Create a strategic plan with your realtor, including a maximum bid amount no matter what happens. If you don’t win the bid, know that there are other homes out there.


Making the Offer


Once you choose your bid, your real estate agent will draw up a contract. This is your final chance to ask for what you need, aside from the actual bid. Think about the full offer and complete the contract accordingly.


Your realtor will send the contract to the seller’s agent. The seller and his/her agent will accept the offer, reject it, or submit a counter offer. If there’s a counter offer, both realtors will go back and forth until you reach a deal. 


Moving Forward With the Accepted Offer


Once the seller accepts your offer, it’s time to move fast! You are now on a deadline. Send your sales contract over to the lender. The underwriter will start the loan process. In the meantime, you should order the home inspection and get your necessary loan documents in order to get your loan to the closing table.


Making an offer on a home doesn’t have to be scary. Working with a reputable realtor and lender helps simplify the process, making it a breeze for everyone involved. 

See What You
Qualify For 👇

Take The Quiz To Get Your Results