How to Make an Offer on a House
An offer is more than a number. Price, contingencies, timing, and deposit size all signal something to a seller — and each of them is negotiable.
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A purchase offer is a legal contract the moment a seller signs it. Everything in it is negotiable, and the parts that are not about price often decide who wins.
The components of an offer
- Purchase price and how it will be financed
- Earnest money deposit — a good-faith deposit held in escrow
- Contingencies — conditions that let you exit with your deposit
- Closing date and possession terms
- Included items — appliances, window treatments, fixtures in dispute
- Seller concessions requested toward closing costs
- Expiration — how long the seller has to respond
The contingencies that matter
| Contingency | Typical window | What it protects |
|---|---|---|
| Inspection | 7 – 10 days | Right to inspect, renegotiate, or exit |
| Financing | 17 – 30 days | Exit if your loan is denied |
| Appraisal | 17 – 21 days | Exit or renegotiate if value comes in low |
| Title | Through closing | Clear, marketable title |
| Sale of current home | Varies | Exit if your own home does not sell |
Deciding on price
Work from closed comparable sales in the last 90 days, adjusted for condition, lot, and square footage — not from list price, and not from online estimates. Then factor in days on market, the number of competing offers, and how the property is priced relative to those comps. A home priced deliberately low to attract multiple offers is a different negotiation than one that has sat for 60 days.
Levers besides money
- Larger earnest money. Signals commitment at no extra cost if you close.
- Flexible closing date. Sellers coordinating their own purchase value this highly.
- Rent-back. Letting the seller stay a few weeks after closing can beat a higher price.
- Shorter contingency windows. Ten days instead of seventeen, without waiving the protection entirely.
- Underwritten preapproval. Reduces the seller's risk that financing collapses.
Escalation clauses
An escalation clause automatically raises your offer above competing bids up to a stated cap. It can win a deal, but it also reveals your maximum, and some listing agents will not accept them. Use deliberately, and require the seller to provide the competing offer as proof.
After you submit
Expect one of three responses: acceptance, rejection, or a counteroffer. Counters are normal and often address closing date or concessions rather than price. Every counter reopens the whole contract — read what changed before signing.
Frequently asked questions
How much below asking price should I offer?
It depends entirely on market conditions and days on market. In a balanced market, 2 to 5 percent below list is a common opening. On a well-priced home with multiple offers, below-list offers rarely get a response.
Can I back out after my offer is accepted?
Within a valid contingency period, yes, and your earnest money is normally returned. Outside those windows, backing out typically means forfeiting the deposit and, in rare cases, further liability.
Should I write a personal letter to the seller?
Many brokerages now discourage or prohibit them because of fair housing risk. Focus on terms instead.
Editorial note. This article is educational and is not legal advice. Real estate contracts, disclosure requirements, and landlord-tenant rules differ by state and locality. Consult a licensed attorney about your situation.
