Making an offer on a house is one of the most consequential financial decisions you'll ever make. Get it right, and you secure your dream home at a fair price. Get it wrong, and you either lose the house or overpay by tens of thousands.
This guide walks you through every step of the offer process — what to include, how to price it, which contingencies to use, and how having a managing broker in your corner changes the outcome.
Before You Write an Offer: The Pre-Offer Checklist
Before putting anything on paper, make sure these are locked in:
- Pre-approval letter: Not pre-qualification — actual pre-approval from a lender with income and asset verification. This is non-negotiable in competitive markets. Get our full pre-approval guide →
- Proof of funds: Bank statement showing your down payment and closing cost reserves.
- Comparable sales research: Your agent should pull recent comps within 0.5 miles, similar size, sold in the last 90 days.
- Property disclosure review: Read every word of the seller's disclosure before offering.
- Budget clarity: Know your maximum — not just what the lender approves, but what you're comfortable paying monthly.
The 7 Steps to Making an Offer
Step 1: Determine Your Offer Price
This is the most critical decision. Your offer price should be based on:
- Comparable sales: What similar homes actually sold for (not listed for)
- Days on market: Homes sitting 30+ days may accept below asking; fresh listings in hot markets may need above-ask offers
- Market conditions: Seller's market (multiple offers) vs. buyer's market (more inventory)
- Property condition: Deferred maintenance or needed repairs justify a lower offer
- Your competition: In multiple-offer situations, your agent should try to learn how many offers are expected
Step 2: Decide on Earnest Money
Earnest money shows you're serious. Standard amounts:
| Home Price | Typical Earnest Money (1-3%) | Competitive Earnest Money |
|---|
| $400,000 | $4,000–$12,000 | $15,000–$20,000 |
| $750,000 | $7,500–$22,500 | $25,000–$35,000 |
| $1,200,000 | $12,000–$36,000 | $40,000–$50,000 |
| $3,000,000 | $30,000–$90,000 | $100,000+ |
Higher earnest money signals commitment and can tip the scales in your favor — but only if you're protected by contingencies. Learn more about earnest money →
Step 3: Choose Your Contingencies
Contingencies are your safety nets — conditions that must be met for the deal to proceed:
- Inspection contingency: Allows you to negotiate repairs or walk away based on findings. Home inspection guide →
- Financing contingency: Protects you if your loan falls through.
- Appraisal contingency: Lets you renegotiate if the home appraises below offer price. Appraisal guide →
- Title contingency: Ensures clean title with no liens or encumbrances. Title insurance guide →
- Sale contingency: Makes the purchase conditional on selling your current home.
Full contingency guide →
Step 4: Set Your Timeline
Your offer should specify:
- Response deadline: How long the seller has to respond (typically 24-72 hours)
- Inspection period: Usually 7-14 days from acceptance
- Financing deadline: When your loan must be approved (typically 21-30 days)
- Closing date: When you take ownership (usually 30-45 days from acceptance)
Flexible closing dates — accommodating the seller's preferred timeline — can be as persuasive as a higher price.
Step 5: Include Strategic Extras
Sometimes it's the small things that win:
- Escalation clause: "We'll beat the highest offer by $X, up to $Y maximum." Useful in competitive markets but reveals your ceiling.
- Rent-back agreement: Let the seller stay 30-60 days after closing if they need time to move.
- As-is language: Waiving repair requests (not inspection rights) shows flexibility.
- Personal letter: Less effective than in past years, and some states restrict them, but can still matter in the right situation.
Step 6: Submit Your Offer
Your agent submits the offer package to the listing agent. This typically includes:
- Purchase and sale agreement (the offer itself)
- Pre-approval letter
- Proof of funds
- Earnest money check or wire instructions
- Any addenda (escalation clause, rent-back, etc.)
Step 7: Negotiate the Response
The seller will do one of three things:
- Accept: Congratulations — you're under contract.
- Counter: They adjust price, terms, or timeline. You can accept, counter back, or walk away.
- Reject: They say no. Your agent should find out why — sometimes a revised offer still works.
Most offers go through 1-3 rounds of negotiation. This is where having an experienced negotiator — not just a licensed agent — makes a real difference.
Offer Price Strategy by Market Condition
| Market Type | Strategy | Typical Offer Range |
|---|
Hot seller's market
(multiple offers, under 14 DOM) | Offer at or above asking. Minimize contingencies. Larger earnest money. Quick close. | 100-110% of asking |
Balanced market
(30-60 DOM average) | Offer at asking with standard contingencies. Room for negotiation. | 95-102% of asking |
Buyer's market
(60+ DOM, rising inventory) | Offer below asking. Full contingencies. Request credits or repairs. | 90-97% of asking |
Stale listing
(90+ DOM, price reductions) | Aggressive below-ask offer. Seller is motivated. | 85-93% of asking |
💡 Pro Tip: Days on market is one of the strongest negotiation signals. A home that's been listed for 60+ days with one or more price reductions tells you the seller is motivated. Your offer can be more aggressive — and you should keep all contingencies.
5 Offer Mistakes That Cost Buyers Thousands
- Waiving inspection to "win": A $500 inspection can reveal $50,000 in problems. Waive repair requests if you must — never waive the right to inspect.
- Offering based on Zestimate: Online estimates can be off by 10-20%. Use actual comps from MLS, analyzed by a professional. Why online estimates miss →
- Ignoring the appraisal gap: If you offer $50K over asking and the appraisal comes in at asking, you need cash to cover the gap — or a renegotiation.
- Fixating on price alone: Terms matter as much as price. Flexible closing, larger earnest money, and fewer contingencies can beat a higher-dollar offer.
- Not understanding buyer representation costs: After the NAR settlement, buyers need to understand who's paying their agent and how much. Traditional 2.5-3% buyer agent fees add up fast. NAR settlement explained →
Why Your Agent's Fee Structure Matters — Even When Buying
Traditional buyer agent commission on a $800,000 home:
$20,000 (at 2.5%)
ShopProp flat fee: $4,495
You keep: $15,505
After the 2024 NAR settlement, buyers are now more aware of how much their agent costs. With ShopProp's flat-fee model:
- Flat $4,495 for full buyer representation — not a percentage of the price
- Managing broker on every transaction — reviewing contracts, guiding negotiations, overseeing closing
- Cash back at closing — if the seller offers buyer agent compensation above $4,495, the difference goes back to you
- 4,000+ transactions since 2007 — the experience is real
The same managing broker who's handled $7.5M luxury listings oversees your $400K starter home. Same oversight. Same expertise. Flat fee.
⚠️ Important: Some buyer agents won't show you homes that don't offer a high enough commission. At ShopProp, every home on MLS is on the table — our fee doesn't change based on what the seller offers.
After Your Offer Is Accepted: What Happens Next
- Earnest money deposited — typically within 2-3 business days of acceptance
- Home inspection scheduled — within your inspection contingency period (7-14 days)
- Appraisal ordered — your lender arranges this once the loan is in process
- Title search + insurance — escrow/title company verifies clean title
- Loan underwriting — your lender finalizes approval
- Final walkthrough — 24-48 hours before closing, verify the property's condition
- Closing day — sign documents, wire funds, get keys
Full closing day guide →
Frequently Asked Questions
How much should I offer on a house?
Your offer should be based on comparable sales, market conditions, and the property's time on market. In a seller's market, offers at or above asking are common. In a buyer's market, you may offer 3-5% below asking. A managing broker can analyze comps and advise on the strongest offer price for your situation.
What is earnest money and how much do I need?
Earnest money is a deposit showing you're serious about buying. Typically 1-3% of the purchase price, it's held in escrow and applied to your down payment at closing. If you back out without a valid contingency, you may forfeit it.
Can I make an offer without a real estate agent?
Yes, but it's not recommended for most buyers. A purchase agreement is a complex legal document. Having a managing broker review contracts, negotiate repairs, and guide you through closing protects your interests — and with ShopProp's flat-fee model, it costs far less than traditional percentage-based representation.
How long does the seller have to respond to my offer?
Most offers include a response deadline, typically 24-72 hours. The seller can accept, reject, or counter your offer. In competitive markets, shorter deadlines (24 hours) can create urgency. Your agent should advise on timing strategy.