How to Make an Offer on a House

Finding a home you like is just the beginning of the homebuying process. Next, you need to submit a competitive offer. Your offer should be based on the list price, the home's condition, your local market, and several other factors. 

Here's how to make an offer for a house.

Determine a fair offer price

The first thing that the seller will look at is the amount you are offering. To determine a fair price, you must know market trends in your area. Use a mortgage calculator to understand how different purchase prices will affect your monthly payment.

If houses are sitting longer than usual, buyers tend to have more negotiating power. This means you may be able to offer less than the list price or ask for additional concessions. 

Your agent can help you structure your offer depending on what is most important to you.

Preparing your offer

After you've determined how much to bid on a home, you will need to prepare your offer. 

Include contingencies

Certain contingencies are standard in residential real estate transactions. For example, most contracts include an appraisal contingency, which means the home must appraise for the purchase price. If it doesn't, financing can fall through.

Decide on your earnest money deposit 

When deciding how to make an offer for a house, the amount of earnest money can show a seller that you're serious. Let's say the seller receives two very similar offers. They may go with the one that includes a higher earnest money deposit. 

Submit the offer

Your real estate agent will write up a contract and send it to you to sign. Carefully review all important details, including the purchase price, contingencies, and closing date. 

If you have any questions, don't hesitate to reach out to your real estate agent.

Negotiate the offer

If your offer is drastically different from the list price or includes concessions that would significantly lower how much money the seller nets on the deal, they will probably counter. 

Some sellers will counter small conditions too. If you receive a counter, review it with your agent and decide whether the terms are acceptable. 

What to do after the offer is accepted

Complete inspections and appraisals 

After your offer is accepted, you will enter an inspection period. During this window, you can schedule one or more inspections and review the reports. 

Finalize mortgage and prepare for closing

Work with your lender to complete the underwriting process. You will also need to wire a deposit to set up an escrow account. This account is used to pay your homeowner's insurance, property taxes, and private mortgage insurance. 

Conclusion

Now that you know how to make an offer for a house, it's time to focus on strengthening your credit history and boosting your score. Tools like Kikoff allow you to report verified rent payments and certain utility payments. 

Build credit responsibly with Kikoff's plans.