Four Key Steps to a Smart Home Offer


You’ve finally found the one. This home checks off your boxes and it’s time to lock it down. Hopefully, you’ve been pre-approved and can act quickly. Most sellers will not accept offers without a pre-approval letter from the buyer’s lender or if paying cash, proof of funds from a financial institution. Here are the next four steps in putting together your home offer.

1. Determine your offer price

You probably don’t want to pay more than fair market value or antagonize the seller with a low-ball offer they refuse to counter. Your Realtor should provide the comps for relevant homes in the area. With that data, you can determine a value range. If several other buyers will likely be making offers, you may want to consider offering higher on the range or maybe even above the asking price. However, you’ll want to take the appraisal into consideration. If you’re obtaining a home loan, your lender will require that the home appraises at or above your offer price. If the home appraises for less than you offered, you and the seller will have to negotiate who will be responsible for coming up with the difference.

2. Prepare your home offer documents

Once you’ve come up with an offer, it’s time to submit formal paperwork. Your agent will help you prepare the offer paperwork. It will include an agreement of sale, which is a legally binding contract that includes all the terms of the deal. It will list a description of the home, your offer price, the amount of your earnest money deposit, and the proposed closing date. This document will also include contingencies like home inspections, financing, and appraisal.

3. Submit your earnest money

When you make your offer, you will also be submitting earnest money. Earnest money is usually one percent of the purchase price and is considered a good faith deposit. When you close on the home, the earnest money will be applied to your down payment. It can’t be paid in cash or with a credit card. The money is held in escrow until that time. Be aware that your earnest money is non-refundable if you terminate the deal for any reason that is not explicitly stated in the purchase agreement.

4. Wait

Your realtor will include your expiration of offer date on the documents, but the wait is never easy. The listing agent will present your offer to the sellers. They may accept it, reject it, or make a counter-offer. Your Realtor should consult with you and continue to negotiate on your behalf until arriving at acceptance or rejection.

If you’re ready to buy a home, I’m happy to share recommendations for trusted lenders and Realtors in your area. Just text or email me.

Check out: Six Easy Steps to Beat Home-Buying Anxiety

Susan Matthews is a luxury home specialist serving greater Charleston with Coldwell Banker Residential. Find out the benefits her buyers receive.

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