How Do I Make an Offer When I Buy a House?

It’s exciting when you make an offer on a house. You’ve spoken with your lender, understand how much you’re qualified to purchase and have now decided on a home you love.

You’re ready to take the next step, but don’t take this part of the process lightly – it’s very important. And if your offer is accepted, you will be legally bound to the contract.document-428338_1280

Here’s how ensure your offer makes good sense.

  1. Low offers don’t always win

In a market where inventory is low, there usually are multiple offers and making a low offer will not get you the home.The first thing you need to know is that you don’t HAVE to make an offer below asking price on any house. Rely on your real estate agent to guide you into the proper price and know if the home will have multiple offers. If you love the house, and it’s priced right already, you could be taking a risk by making a low offer.

The best deals on the market still sell quickly, with much demand, and houses that are bargain priced don’t last long. It’s just that the “bargain prices” are much lower now than they used to be. So, if you find a house that you absolutely love, and it’s already priced right—think carefully before you make a low offer. Someone else may snatch it up first.

  1. Determine the Value

The first step in making an offer on a house is to determine the value of the home. Your real estate agent can do a lot of the legwork for this part. Gather a list of “comp’s” (or comparables) in the neighborhood. These are similar properties that have sold recently. Focus on the sold houses, and the current listings that are available in your area. The fewer homes on the market, the higher the demand.

Make adjustments in price for differences in the homes, such as:

  • Living area square footage
  • Number of bedrooms
  • Number of bathrooms
  • Lot size & location
  • Extras, such as a pool or fireplace
  • Condition

Rely on your agent to know the price you should offer as they talk to other agents, know what price other similar properties sold for,  how many other offers will be on that property, and can tell you whether they feel your offer price will actually be competitive enough to potentially get the home into contract.

  1. Contract Contingencies

After you’ve decided on an offer price, have your real estate agent write it up. There will usually be appropriate contingencies to the offer, for appraisal, financing, etc. A contingency is a condition that must be met before the contract becomes fully valid. Some people, in order to have a more competitive offer, write without a contingency. If you are financing the new home, you will need a contingency “unless” you have a full approval from your lender before you offer. Many lenders offer full credit approvals, where you can go into an offer w/o the financing contingency, and just need to ensure the property appraises and has no other issues. No financing contingency helps out tremendously when you are competing with “all cash offers”.

Another contingency is for home inspections. You’ll usually want a general home inspection to ensure that the house is actually in the condition you expect. Often sellers already have the inspections for you to review before making an offer so check with your agent as this will save time and money.

It’s an exciting experience to buy a house in the Bay Area. But before you do, make sure that you make a smart offer on the home. You want your offer to allow you to get the right price on the home, plus you want to make sure that you’re protected in the process.

In buying a home, work closely with your real estate agent, and your loan agent, and you will save yourself a world of trouble down the road. The path to homeownership is exciting, when you work on it correctly. To learn more about purchasing a home in the Bay Area, contact me today. I would love to help you through each step of the loan approval process.

Contact me today at 408-506-0542, or email to

Loan Star Lending NMLS# 181709 – CA# 603K799

Karen Cimera

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