How to Make an Offer on a House

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Contributor, Benzinga
May 10, 2024

Buying a house is a huge step. It can lead to greater stability for your family and the chance to build your forever home. When you find your dream home, it can be exhilarating and a bit scary. What do you do next? You make an offer! Read on for how to make an offer on a house. 

Before You Make an Offer

When you think of buying a house, most people picture the happy moment when the final sale contract is signed. But before that, you'll need to research, network and get prequalified. You'll want to build your credit score and take a look at your financial health.

Then, before you make an offer, it's important to get prequalified for a mortgage. Home sellers prefer buyers who are prequalified as it reduces the chances of the sale falling through if the buyer fails to qualify for a mortgage. Consider getting a mortgage broker to help you find the best available offers.  

In addition, you'll want to find a trusted real estate agent or broker to help you compare comparable properties on the market comps to ensure you're getting a fair price. Many of the steps below will happen before you actually craft the home offer. 

8 Steps for How to Make an Offer on a House

Here are the steps you take to make an offer on a house, from researching potential properties to signing the sale contract.  

Step 1: Research the Market

Research the local real estate market to determine fair market value. This important step can happen long before you've found your dream property. In fact, the earlier you start, the better. With in-depth knowledge of target markets — where you'd love to live — you will more easily recognize an under-market value opportunity.

You can also work with a real estate agent to analyze recent sales and comparable properties. Consider looking at market trends for three months to a year prior. 

Step 2: Establish Your Budget

It's important to determine a budget before making an offer. You can work with a mortgage lender to get pre-approval, but you should also calculate what you can comfortably afford. This amount depends on monthly income, job security, total savings and costs. You'll want to calculate costs such as down payment, closing costs and additional expenses. 

  • Does the lender require 3% down or 20% down?
  • How much are closing costs? As an average, you can estimate closing costs at 3% of the loan value.
  • Are there additional fees or costs, such as appraisal or inspection costs?
  • Are you planning to purchase a property that needs renovation? How much will you budget for renovations?

Step 3: Get Pre-Approved for a Mortgage

The benefits of getting pre-approved for a mortgage before making an offer are simple: it's better for both the buyer and the seller. As the buyer, you'll know exactly how much you can afford and approximately what you'll pay monthly. For the seller, a pre-approved buyer demonstrates preparation and seriousness on the part of the buyer. 

You can obtain pre-approval from an online lender, local banks or credit unions. Consider comparing the best available mortgage rates and selecting the lender that meets your needs before getting pre-approval. 

Step 4: Hire a Real Estate Agent

You gain numerous advantages from working with a qualified real estate agent. They offer in-depth market insight and access to the MLS to check property listings and can guide you through the process of negotiating and closing on a home. 

When finding the right agent, look at their personality and how comfortable you are working with them. You want to feel that the real estate agent will be your trusted partner throughout the process. Even more importantly, be sure to vet their experience and credentials to ensure they're qualified to help you close. Most importantly, check that they have an active real estate license for your state. 

Step 5: Evaluating the Property

When you find a property to purchase, you'll need professionals to evaluate the property. While this happens in detail after you're under contract, you'll want to initially check the condition of the property. 

Look at the roof, foundation, windows and doors. Check for cracks in the walls, especially around the baseboards or foundation. If you want to look more in-depth, you'll want to examine the quality of the siding, if the roof is wavy, the upkeep on the yard, and whether there are large trees close to the property. Remember, this is the only first step; you'll still need inspections after an offer is submitted.  

You can evaluate the quality of upkeep for the property compared to local properties and discuss the evaluation with your real estate agent. 

Step 6: Craft and Submit an Attractive Offer

If you're ready to make an offer, your real estate agent can help you create a compelling offer. Consider the condition of the home, comps and how long it's been on the market to determine a fair offer price. While there are times when you could offer under the asking price, remember that when sellers receive multiple offers, they will usually choose the highest offer. 

You want to include the offer purchase price, contingencies and closing timeline in the offer. You'll also want to include a compelling personal letter. When sellers face many competing offers, they usually choose the most personally compelling offer. Don't be afraid to tell your family's story and explain what the home means to you. 

Include in the offer:

  • The address of the home
  • Your name and the name of anyone else who will be on the house title
  • The offer amount for the home
  • Any contingencies, such as a successful inspection
  • Any concessions include asking the seller to cover closing costs or specific repairs
  • Items you want in the sale, such as appliances or lighting fixtures
  • The deposit amount or earnest money
  • Your mortgage pre-approval letter
  • The date you can close on your loan
  • The date you would like to move into the home
  • The offer deadline (24 to 72 hours) 

Your real estate agent will submit your offer to the seller's agent, including all necessary documents. Your offer will include the time the offer is valid, which is usually 24 to 72 hours. 

Step 7: Negotiate and Counteroffer

After the seller's agent receives the offer, the seller has between 24 and 72 hours to respond. If your offer is accepted as-is, you can sign a purchase contract. However, in many cases, the seller will come back with a counteroffer or negotiations. 

Your real estate agent can help you strategize and navigate the negotiation process effectively. Remember that you can negotiate more than just the purchase price. For example, consider trading a concession or repairs for a lower purchase price. 

If you want an especially fast sale on an under-market value property, you could waive a contingency such as inspections. However, in most cases, this isn't the best negotiation technique. Instead, focus on accepting the home as-is, increasing your offer or suggesting a faster closing. 

You might have to go back and forth with the seller multiple times. Be sure to respond quickly and work to find a solution that's favorable for both parties. In some cases, the seller will reject the offer. In that case, you'll have to move on and trust there are better opportunities for you. However, if you do reach an agreement with the seller, you'll have a chance to sign a purchase agreement and work through contingencies to finalize the purchase. 

Step 8: Finalize the Purchase

Once the seller has agreed to the purchase price, it's time to sign a contract. The home is considered under contract until all contingencies are met. After the property is under contract, you'll need to deposit the earnest money and get all necessary inspections, complete loan paperwork and perform final due diligence. You will also need to perform a title search to ensure the property is free of liens. 

Tips for navigating the closing process smoothly include working closely with your real estate agent and a real estate attorney to facilitate the process. Following up on these steps and preparing ahead of time can help you overcome delays in closing. 

Once all contingencies have been met and you've finalized the mortgage, you can sign the purchase contract and close on your new home.

Buying Your Dream Home

The process of making an offer, securing a mortgage and closing on a home can be thrilling. It also typically takes two months or more. During this process, you'll want trusted partners in a real estate agent and real estate attorney to help advocate for your best interests. Don't be afraid to ask questions and reconsider as you work to make an offer and secure the best available home for your family. Still preparing to buy? Learn more about how to save up money for a house. Also, consider a no-closing-cost mortgage if you want to make a smaller downpayment. 

Frequently Asked Questions 


Do I need to have a pre-approval letter before making an offer?


You should get a pre-approval letter before making an offer. This document helps you and the seller and can facilitate the closing process.


What contingencies should I include in my offer?


The most common contingencies include appraisal, mortgage, title and home inspection contingencies. You might also include the sale of your prior home as a contingency, which allows you to withdraw an offer if you cannot sell your current home within a specified timeframe.


What happens if the appraisal is lower than my offer?


If the appraisal is lower than the offer, you have a couple of options. You could re-negotiate the purchase price with the seller or put down additional cash, as the mortgage lender will base the loan on the appraised value. If you make a cash offer, it won’t change the purchase price if you decide to go ahead with the offer.

Alison Plaut

About Alison Plaut

Alison Plaut is a personal finance and investing writer with a sustainable MBA, passionate about helping people learn more about wealth building and responsible debt for financial freedom. She has more than 17 years of writing experience, focused on real estate and mortgages, business, personal finance, and investing. Her work has been published in The Motley Fool, MoneyLion, and she regularly contributes to Benzinga.