How to Make an Offer on a House: A Step-by-Step Guide

You've found a house you want. Now comes the part where most first-time buyers feel completely out of their depth — submitting a purchase offer. The process is more structured than it seems, but the stakes are real: your offer document will become a binding legal contract if accepted, and the terms you set determine your protection and your risk.

Here's what the process actually involves.

What an Offer Contains

A real estate purchase offer is a written contract (usually on a state-specific or local real estate board form) that includes:

Purchase price. The dollar amount you're offering to pay. This is the center of the negotiation.

Earnest money deposit. A good-faith deposit — typically 1–3% of the purchase price — paid within a day or two of offer acceptance. This money goes into escrow and applies toward your down payment and closing costs at closing. It signals commitment. If you back out without a valid contingency, you generally forfeit it.

Down payment and financing terms. Your intended down payment percentage and loan type (conventional, FHA, VA, etc.). If you're paying cash, that's stated here.

Contingencies. Conditions that must be satisfied for the contract to proceed. These are your exits — the legitimate ways to back out and get your earnest money back. Common contingencies include:

• Inspection contingency: Allows you to have the home professionally inspected and negotiate based on findings or exit if defects are unacceptable.
• Financing contingency: Allows you to exit if your mortgage falls through. Only waive this if you're paying cash or have iron-clad financing already committed.
• Appraisal contingency: Allows you to renegotiate or exit if the home appraises below the purchase price.
• Title contingency: Allows exit if a title search reveals liens, disputes, or other problems with the seller's ownership.
• Sale contingency: If you're selling your current home, this allows exit if your sale falls through. Sellers are often reluctant to accept this contingency because it introduces uncertainty.

Closing date. When you intend to close — typically 30–45 days after offer acceptance for financed purchases. Cash buyers can often close in 2–3 weeks.

Personal property. What's included in the sale. By default, fixtures (built-in appliances, light fixtures, built-in shelving) are typically included; personal property (refrigerators, washer/dryers, lawn equipment) may or may not be. Specify anything you want included or excluded to avoid disputes.

Expiration. How long the seller has to respond before the offer expires. Typically 24–72 hours in most markets.

Disclosures and addenda. Your state may require specific disclosures or forms as part of an offer.

How to Decide What Price to Offer

Offer price is the most consequential decision in the process. Here's how to think about it:

Start with recent comparable sales (comps). Your agent should pull sales of similar homes — similar size, condition, location, age — that closed in the last 90 days. These tell you what buyers have actually paid, not what sellers are asking.

Assess supply and demand in the current market. How many competing buyers are there? How quickly are similar homes going under contract? If good homes in your market are going within days and frequently above asking price, your offer needs to reflect that. If homes are sitting for 45+ days and sellers are reducing prices, you have negotiating room.

Consider the asking price as a starting point, not a ceiling or floor. In a hot market, list price is often the minimum competitive offer. In a slow market, offering 3–7% below list with justification (recent comps, property condition) is reasonable.

Evaluate the seller's situation. A seller who's already purchased their next home needs to close by a specific date — that creates leverage for you. A seller who's in no hurry has less motivation to negotiate.

Know your walk-away number. Before you make an offer, decide the maximum you're willing to pay. Not the maximum the bank will approve — the maximum that makes sense for you given the property's condition, location, and your assessment of value. Write that number down. In competitive situations with time pressure, having a pre-committed ceiling prevents emotional overbidding.

Multiple Offers: What to Do

If the seller has received or is expecting multiple offers, you'll often be asked for your "highest and best" in a compressed timeframe. Strategies that can help without just raising your price:

Escalation clauses. An escalation clause states that you'll beat any competing offer by $X up to a maximum of $Y. This keeps you competitive without automatically paying more than necessary. Some sellers prefer not to accept escalation clauses (they want clean offers); ask your agent about local norms.

Flexible closing date. Offering to close on whatever timeline works for the seller, or matching their specific preference, can win deals without raising price.

Larger earnest money. A 3% earnest money deposit signals stronger commitment than 1%, all else equal.

Pre-approval letter from a local lender. Pre-approval from a known local lender carries more weight than approval from an online lender, because listing agents and sellers know that local lenders don't over-approve.

A personal letter. In some markets, buyers write personal letters to sellers explaining why they love the home. These can help in certain situations. Be cautious: fair housing laws prohibit sellers from discriminating based on protected characteristics, so your letter shouldn't include anything that reveals race, religion, national origin, family status, or disability. Many agents now advise against letters for this reason.

What Happens After You Submit

Once your offer is submitted, one of three things happens:

Acceptance. The seller signs the offer as-is. You're under contract. The clock on your contingency periods starts immediately — usually 7–14 days for inspection, 21–30 days for appraisal, and your mortgage contingency period. Miss these deadlines and you may lose your contingency protections.

Counteroffer. The seller responds with a modified offer — typically a different price, closing date, or terms. This is a new offer from the seller, not an acceptance. You can accept the counter, counter back, or walk away. Counteroffers can go back and forth several times. This is normal.

Rejection. The seller declines without counteroffering. This sometimes happens when you're one of several offers and the seller went with another. Occasionally the seller's agent will tell you what the accepted price was. You don't have any rights to this information, but it's useful market data if you get it.

What "Contingent" and "Pending" Mean

When you see a listing marked "contingent," it means the seller has accepted an offer but the contract has one or more contingencies not yet satisfied — typically inspection or financing. Many sellers continue showing the home in contingent status and will accept backup offers.

When a listing shows "pending," it means the offer is accepted and contingencies have been removed (or the sale is proceeding unconditionally). The home is effectively sold; it just hasn't reached closing yet.

In practice, the difference matters if you're considering making a backup offer. A contingent property may still fall out of contract; a pending one rarely does.

UK, Canadian, and Australian Buyers

UK: The offer process differs significantly. Offers in England and Wales are not legally binding until contracts are exchanged — which happens weeks or months later. This creates the risk of "gazumping" (the seller accepting a higher offer from another buyer after accepting yours). Asking the agent to mark the property SSTC (Sold Subject to Contract) quickly reduces this risk.

Canada: Offers include conditions similar to US contingencies but use different terminology. A "subject to financing" condition and a "subject to inspection" condition are the most common. "Removing subjects" — waiving these conditions — is the point at which the deal becomes firm. Removing subjects without satisfactory financing or inspection is high risk.

Australia: Auction purchases are unconditional — if you win the auction, you own the home, with no cooling-off period. Pre-auction offers may include conditions. Private sales typically allow a cooling-off period (varies by state), during which you can withdraw with a small penalty. Always have your financing confirmed and inspections done before bidding at auction.

Before You Submit

The most important thing you can do before making an offer is to have your pre-approval in hand, your earnest money ready to wire, and your inspection contacts already lined up. Offers are accepted quickly, and contingency clocks start running immediately after acceptance. Being prepared means you can move through the process without losing protections due to disorganization.

The First-Time Homebuyer Toolkit includes an offer strategy guide and a contingency calendar template to track every deadline from offer acceptance through closing — so nothing falls through the cracks at the most consequential moment in the purchase.