How to make an offer on a house: 8 steps in the paperwork

How to make an offer on a house and avoid frequent mistakes

The home buying process is a grand event in every person’s life. But in moments of joy, you need to not forget about a lot of responsibility associated with paperwork and many other things. So, let’s discuss how to make an offer on a house properly. It’s 8 simple steps and a bonus video.

Before you make an offer on a house

Perhaps one of the most important points in this area will be the paperwork. Be sure to completely review every line of contracts, especially those that you sign.

Be sure to see that you have an approving letter from the real estate agent. It will give a decisive impetus to the basic design of documentation for the house.

Get approved for a mortgage

Mortgage is a rather difficult process that requires a lot of paper documentation. But nevertheless, it is better to start doing it at the moment when you just decide to buy a house or already find a dream house. There are two main reasons for this:

1) you will be able to buy a house immediately after its evaluation.

2) sellers give preference to buyers who already have an approved mortgage loan.

Also note that agencies often use the pre approval letter and pre-qualification condition interchangeably, even though they are two different types of loan approval. Sellers and their agencies are often stricter about this since all information must be confirmed.

The highest level will be the pre-approval letter of the mortgage with documentation to confirm it, for example, in the form of a VAL from Rocket Mortgage from mortgage lenders.

Do not delay with the purchase as all certificates have an expiration date.

Joyful emotions at mortgage loan approval

Find an experienced real estate agent

A very convenient way to find housing is a real estate agency. Although it will be cheaper to home search, but there is a risk losing in this method. It is better to pay a commission to the listing agent, but to work with experienced specialists. So, you can comfortably afford to find a home.

Buyer’s agent will help you save time and nerves. Real estate agents know the market very well and can help you find a good house at a bargain price. So, in a sense, with the help of agents, you can save money.

Also, do not forget that such buyer’s agent checks all documentation very carefully and help with it so that you do not forget anything. The real estate agent work is very important. Depending on your state, this type of business requires licensing.

How do you make an offer on a house?

After you have received a letter of approval, hired the necessary real estate agent who helped you find your dream home, the step of submitting an offer comes. There are a few basic steps that you need to do:

  1. strategy: before contacting the seller, you need to calculate the full amount that will be required for the repair and arrangement of housing, including the work of specialists, technical work, and unforeseen situations.
  2. make an offer: be sure to register the offer together with your agent, he will help you to make a good offer competently and clearly.
  3. negotiations: after you have sent the offer, you will receive a response from the seller. There can be three possible scenarios: approved, rejected, request for changes.
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In accordance with the situation, the seller can make a counter offer, the real estate agent acts as a link that will control everything.

8 Steps how to make an offer on a house

Read on to learn the 8 steps of how to make an offer on a property, and watch the bonus video to avoid common mistakes.

Step 1: Get preapproval for a mortgage loan

Preliminary approval is the main stage in obtaining a mortgage. It calculates the possible cost of your new home based on your credit history and income. They are formed on the basis of the certificates that you provide to the bank. Next, the bank issues papers that indicate the right to a house in a certain amount.

Preliminary approval is the first point to make an offer for a house.

As mentioned earlier, you must provide the bank with basic information about income and credit, after which you are given a document not only about the amount for which you are entitled to buy a house, but also the interest rate, closing cost estimate, monthly payment amount and asking price.

The main secret of a positive offer is preliminary approval, be sure to attach this document to the offer. This will indicate that you have sufficient funds to buy this housing.

Also pay special attention to whether you are getting pre-approval or pre-qualification. These are two different things that are interchangeable in the bank. But for sellers, they make a significant difference. And, as a rule, people with preliminary qualifications are denied a loan or mortgage.

Step 2: House hunting

The next step after getting approval is to search for a house. We recommend that you first pay attention to ads on the Internet and explore the buyer’s market, in the settings, specify the criteria that you need, so you can find something faster.

Or, look through the ads with your agent, they, as a rule, themselves send possible options based on your criteria, after which tours are formed during which you will visit and see these houses.

After you have found your dream home, consider all its criteria. Pay special attention to the following points:

  • how long it has been on the competitive market: the longer the house is on the competitive market, the fewer competitors, respectively, the chance of buying a home increases.
  • how long the current owners live there: long-time homeowners, as a rule, have a strong attachment to the house, so they will put the highest asking price, or they are pickier about buyers. In the sellers’ market, it is better to look for those who have lived in the house for no more than five years.
  • whether it was renovated or expanded: depending on the work that was carried out there, the price of the house may change, this point is very important to discuss with the agent.
  • in which area the house is located and what is nearby: pay special attention to the presence of a hospital, shops, schools, kindergartens, bus stops and other factors that you need. So, you will be able to understand whether this house corresponds to the price. As a rule, houses are more expensive in nicer areas.

The better you know this house, the more likely a good deal is.

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Research the real estate market online

Step 3: How much to offer for the house

A very important step is the proper allocation of the budget, here are few tips that will help you:

  • research the house and its history: if you know how old the house is, how many years the last owners owned it, how long it is on the market, you will be able to formulate the price correctly. Your agent will help you with this.
  • Knowledge of the purchase price market: starting from the average price of houses of such a plan, you will be able to calculate the approximate range of the cost of such a house, which is very important. Knowledge of the seller’s market will help to avoid overpayments.
  • stick to your budget: after you have received preliminary approval, you will find out the amount you can use.
  • seller reviews

Try not to exceed it, otherwise in the future the bank may refuse a loan, because the house will not pass the assessment. Make a detailed budget with the necessary expenses for repairs, so as not to exceed the calculated budget.

Step 4: The amount of the earnest money deposit

A serious earnest money deposit is the amount of advance money that you invest in a transaction that you will lose in case of termination of the contract with the seller. The reason is usually unforeseen circumstances.

This money comes escrow account to the seller’s account from the down payment amount and they usually amount to 1-2% from purchase price, not in your personal finance. Such a cash deposit shows how serious you are about buying a home and makes you the main buyer and will push away other buyers.

Step 5: Unforeseen financing contingency

Pay attention to unforeseen expenses: be sure to set aside some amount of money for unforeseen expenses. This will help you avoid unpleasant situations during repairs, and also give you the opportunity to hedge. We advise you to pay attention to the following points:

  1. home inspection for cracks, irregularities, leaks, roofs, etc.
  2. evaluation in local market
  3. financing
  4. home sale contingency – this item is very important, sometimes it is prescribed like this (you agree to buy the seller’s house, but not until your existing home sale (such a home sale is not available in all states))
  5. property taxes and real estate attorney

Since unforeseen circumstances have a great risk for the seller, this detailed study of the risks will make you competitive.

Step 6: Drafting the house offer letter

The purchase offer must be compiled with an agent to avoid mistakes. It specifies:

  1. seller’s name
  2. real estate address
  3. the names of everyone who will be registered, including you
  4. the asking price you offer and the initial payment (be sure to consider the home price together with the agent)
  5. serious earnest money deposits from down payment
  6. any appraisal contingency that you would like to include
  7. any concessions that you request from the seller
  8. full list of closing costs
  9. dates of arrival, transaction, registration and closing date and offer’s expiration
  10. deadline for responding to an offer
  11. preapproval letter with bank account

In general, some items may vary depending on the state and local laws, but they will be basically similar. A well-written offer will bring you closer to a positive answer and will push other buyers back. It is possible that you will have to write multiple offers.

Remember that the seller usually has an offer stand with multiple buyers, so, you need to make the best possible offer.

Step 7: The price and terms of sale

After seller accepts, it is time to negotiate the price. You have several options if the seller makes a counter offer cash. You can accept the offer as is, make your own counteroffer, or reject the counteroffer and move on.

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If you decide to negotiate and make a counteroffer, know that it is often necessary to go through several rounds of negotiations before coming to an offer that suits both sides.

Step 8: Purchase agreement

Once you and the seller come to a purchase agreement, you will complete the purchase contract and both parties will sign it.

You will then send this contract to your mortgage lender with seller’s agent to continue the mortgage process where your pre-approval left off. Your lender will order an assessment and you can set up a home inspection.

And finally, here’s a video to avoid common first-time homebuyer mistakes by @Georgia Coast Homes by Karin Carr:

Chapter FAQ

How do I make an offer on a house?

To make an official offer on a house, so that the seller accepts a decision in your favor, you will need:

  • The seller’s name, home address and the name of everyone you are going to sign.
  • The asking price you offer
  • The amount of your initial payment
  • The amount of your deposit for earnest money
  • Your letter with the preliminary approval of the mortgage
  • Any unforeseen circumstances that you want to include
  • Your preferred closing costs, check-in dates and closing process date
  • Deadline for consideration of the proposal.

Your real estate agent or lawyer can make an offer on your behalf, but they will need your opinion on the price, down payment, deposit, and other details. It is possible that you will have to write multiple offers. Do not delay for a long time with thoughts about the final purchase, as the offer expiration date may end.

How do I make an offer to a seller?

Knowledge of the local housing market, the situation with the seller and the history of the house – all this can help you make the best possible offer. Do your research and work closely with your real estate agent to get all the information you can. Your agent can also consult with the seller’s agent to get more information about their motives and ideal timing.

How do you convince a seller to accept an offer?

Show the seller that you have studied in detail all the risks and opportunities of the house. Also get pre-approval. An earnest money deposit will be a good indicator.

How do you make the strongest offer on a house?

The best offer is the one in which all the points are clearly spelled out. The documents are properly executed in accordance with the requirements that suit you and the seller. While viewing the house, you can ask the seller on what terms he is ready to sell the house.

Entering into a real estate contract


We hope that we were able to give you an answer to the question of how to make an offer on a house. The main criteria is the purchase price, risks, and deposit with earnest money do not forget about it. Most importantly, read the purchase and sale agreement very carefully.

Also, when choosing, remember about the comparative market analysis. The offer price may vary from many indicators, study them so that the offer price is the best for you. Good luck in signing the sales contract. Hope you need design tips soon enough!

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