You found a great house. Time to make an offer. It seems a little daunting, but your agent will handle it for you. Here’s how the real estate offer process works.

Setting your price

Deciding how much you’re willing to pay is one of the most agonizing parts of any real estate transaction, especially if you’ve found a house you really love.

Some buyers try to lowball to save money, but that can backfire. The seller may not counter at all. In an active housing market, buyers can lose out on a deal with this tactic.

Depending on the year and market, most homes sell within 4-8% of their asking price, so keep that in mind when you’re considering your offer price.

Your agent will guide you through this process, using current market analysis and comparisons to other similar homes in the area.

Contingencies & Details

It’s crucial that your offer include a contingency—essentially an IF statement—of a successful home inspection. That means you’re offering to buy the house  IF you’re happy with the home inspector’s report.

The second major contingency is for buyers who already own a home. If you’re selling one house and buying another, you probably want a contingency stating that you’ll buy house #2 IF you sell house #1 first. Some sellers don’t like these contingencies, but they’re pretty standard.

Similarly, you’ll need a contingency for securing a mortgage through a lender. Otherwise, you’d be signing a contract to buy a several-hundred-thousand-dollar property without a guarantee of financing—oops.

You’ll need to include other details too. Things like target closing date, provisions for pro-rating miscellaneous annual expenses like real estate taxes, water bills, and other utilities, and also provisions for a last-minute walk through.

Your offer should have a specified expiration date and time. That means that if the seller doesn’t act fast enough, you can back out without losing your deposit.


With the offer, you’ll also need to provide a deposit check. It’s not technically a requirement, but it’s absolutely the industry standard and essentially required in order to be taken seriously by the seller.

Deposits are usually around $1,000, but each case is different and your real estate agent will tell you how much.

Your offer should explain how your deposit money will be returned to you if your offer is rejected, or kept as damages to protect the seller if you back out of the deal without an adequate reason to do so.

Counters & Negotiation

Every time you submit a formal offer, the sellers have the opportunity to respond with a counteroffer. The counter typically includes a higher sale price, but could include other smaller changes.

Some examples of counter details: higher deposit, different contingencies, different closing date, or shifting responsibility for some costs from seller to buyer.

The counteroffer, like an offer, has an expiration date, so you have to decide pretty quickly if you’ll accept.

When you analyze the counteroffer, you and your agent should discuss which parts are acceptable to you, and which parts are not. You can either accept the counteroffer as is, or submit your own counteroffer in response with a “middle ground” you can live with, and you think the sellers will accept.

Keep in mind the sellers can always decline your offer! Your agent will advise you on how to make these counter-counters, but the final decision is always yours.


Be prepared for the offer/counteroffer phase to take 1-2 weeks. Each volley of offer will have its own expiration date, typically 3-5 business days from the offer date.