Writing a competitive offer is integral to landing the home of your dreams under the terms you desire. Understanding the various components of this process can help you collaborate with your agent to get it right.


Home SearchYou successfully defined your budget, engaged a mortgage lender and crafted a strong search. After all of that work you have finally identified the right home. You are confident you are ready for the next step-- to write your first offer.

While it can seem like you may be nearing the finish line, in many aspects the real race has only begun. And while an experienced real estate agent will prove invaluable in helping you break the tape, you need to work in collaboration to tackle a few key action items along the way:

Define the Purchase Price

While this may seem pretty straightforward based on list price, this step can be anything but. Obtaining value means juggling a variety of variables:

  • How long the property has been listed
  • Current market environment and inventory of similar homes
  • Motivation of the seller
  • Existence of competing offers

This is one spot where an experienced local agent can shine particularly brightly. The wisdom of their experience can help you balance all of these components and dial in a price that is attractive enough to either close the deal or at a minimum elicit a counter.

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Determine Contingencies

Contingencies lay out specific criteria that must be satisfied in order to execute a sales contract. While nearly every purchase agreement will contain a buyer’s inspection and financing contingency, there is great flexibility in which other factors should be written into your offer. For instance, many purchase agreements are contingent on the buyer selling their current home.

Contingencies are important to protect the buyer, but they can also be seen as burdensome by the home seller. Again, we are looking for balance to ensure you have the protections you need but in terms the seller can also accommodate. A good overview of common contingencies to consider is available here.

Consider Concessions

Depending on the market conditions, you may wish to include concessions in your offer. These could include asking the seller to help finance your closing costs. This may be appealing as a way to build flexibility if you have limited cash in hand and need to invest the majority in your down payment.

Additional concessions may include property specific items that you’d like included in the sale like appliances and furniture. All concessions (along with other components of your offer) are negotiable within the counter-offer process.

Make a Deposit of Earnest Money and Share Your Financing Details

Earnest money is a good faith investment that shows you are serious about purchasing a home. It is submitted with your offer, paid by the buyer and typically 1%-2% of the purchase price (but can be more). If the purchase agreement is accepted and the offer terminates due to issues not covered in contingencies, earnest money is generally forfeited to the seller. This gives the buyer some ‘skin in the game’ as a protection for a seller who faces the risk of accepting a purchase agreement only to have it fall through later after significant investment of time.

In addition to earnest money, sellers are further protected by asking buyers to disclose funding details in their offer. These detail show how you’ll pay for the down payment and how your mortgage loan will be structured. Your mortgage professional and real estate agent can collaborate to help you complete this section of your offer as well as help you understand an appropriate amount of earnest money to include.

Select Your Closing Date

A closing date can seem like a benign detail, but can be important depending on the circumstances for either the buyer or seller. Generally a 30-day closing period is standard, but your offer can stand out if you have flexibility in timing. Generally your agent can understand your situation and speak with the selling agent to help you come up with the best closing date for your transaction

Include an Expiration in Your Offer

A sometimes overlooked detail in this process is the expiration of your offer. A clear expiration date spelled out in the purchase agreement can offer a deadline to ensure your offer receives a prompt response.


The Bottom Line

While this may seem like an extensive list, it is truly represents the bare minimum of factors to consider when writing an offer. While the process can seem intimidating, the process need not be, though it is important to get the details right. This is a legal contract for what is likely to be your largest purchase to date.

That is why engaging a qualified agent who does this routinely can be crucial.  Zach Adams has extensive experience writing purchase agreements for new buyers and experienced real estate veterans alike. His approach includes educating clients about the options available and the risks and rewards inherent in each.

Zach has a proven track record in the west metro of Minneapolis and the wisdom earned across 100s of transactions. He’d love to help you no matter where you are in the process-- from locating the right property, to submitting a competitive offer, through closing on the home of your dreams.

Contact Zach today at 612.845.7890 to get started.