Finding a home you love is only half the battle. Getting your offer accepted — especially in a competitive market — requires knowing how to structure an offer strategically. Here’s how to do it.
Start with comparable sales
Before deciding on an offer price, look at recent comparable sales (“comps”) — homes similar in size, condition, and location that sold in the last 60–90 days. Your agent can pull these from the MLS. Comps tell you what buyers have actually paid, not what sellers are asking. In a seller’s market, homes often sell above list price; in a buyer’s market, below. Understanding where the market is sets your baseline.
What goes in an offer
- Purchase price. The amount you’re offering to pay.
- Earnest money deposit. Typically 1–3% of the purchase price. More earnest money signals stronger commitment.
- Contingencies. Conditions that must be met for the sale to proceed — inspection, financing, and appraisal are standard. Waiving contingencies strengthens your offer but increases your risk.
- Closing date. When you want to take ownership. Matching the seller’s preferred timeline can be as valuable as a higher price.
- Inclusions and exclusions. What stays with the house (appliances, fixtures) and what doesn’t.
- Expiration. How long the seller has to respond — typically 24–48 hours.
How to price your offer in a competitive market
In a hot market, list price is often a floor, not a ceiling. Look at the list-to-sale ratio in your target area — if homes are routinely selling 3–5% over asking, price accordingly. An escalation clause is a useful tool: you offer $X, but will automatically beat any competing offer by $Y up to a maximum of $Z. This protects you from leaving money on the table while staying competitive.
Making your offer stand out beyond price
Price isn’t always the deciding factor. A pre-approval letter (not just pre-qualification) from a reputable lender reassures the seller your financing is solid. A larger earnest money deposit signals commitment. A flexible or fast closing timeline appeals to sellers with specific scheduling needs. A personal letter to the seller — while controversial and of uncertain legal standing in some states — occasionally makes a difference in emotionally charged sales.
Contingencies — what to keep and what to consider waiving
The inspection contingency gives you the right to back out or renegotiate if major issues are found. The financing contingency protects you if your mortgage falls through. The appraisal contingency protects you if the home appraises below the purchase price. In a competitive market, some buyers waive the appraisal contingency (risky — you’d owe the difference in cash) or the inspection contingency (very risky). Never waive the financing contingency without being certain your loan will close.
Responding to a counteroffer
Sellers often counter rather than accept outright. A counteroffer means they’re interested — it’s a negotiation, not a rejection. Evaluate each element: price, closing date, contingency adjustments, and any credits requested. Counter back on the items that matter most to you and concede on those that don’t. Most transactions involve 1–3 rounds of negotiation before a final agreement.