Whether it’s the first house you’ve looked at or the hundredth, you’ve found a property that checks all the boxes, and now you’re ready to make an offer—a competitive offer where a seller will accept yours over anyone else’s.

How do you make that happen? We’ve got a few ideas. Through a mix of advance preparedness and case-by-case decisions to discuss with your real estate agent, you’ll be well equipped to provide sellers with an attractive offer. 

What does an offer entail?

Before we get into how you prepare an offer, you’ll probably want to know exactly what one entails. Offers are written, legally binding documents. You might see free templates online, but we strongly advise working with a real estate agent who will handle all aspects of the offer for you, particularly if you’re a first-time homebuyer. Offer letters are subject to state and local laws, so an online boilerplate probably isn’t going to cut it, so don’t DIY. 

However, a lot of the information in an offer is pretty straightforward. Most written offers include property details (like the address), price details, earnest money (more on that later), possible contingencies, an estimated or preferred closing date, and an outline of the buyer’s intent for closing costs and fees. The offer will also include an expiration date—sellers won’t have all the time in the world to review. 

Get Pre-Approved

Now that you’ve got the gist of what’s in an offer, let’s back up. One of the easiest ways to show sellers you’re a serious contender is by getting pre-approved. Pre-approval means a lender will determine how much money you’re eligible for to buy a home.

You’ll typically visit a bank or other mortgage lender, where loan experts will assess your income, credit score, and other factors to get a sense of how much you can borrow. Then, they’ll write a letter, providing you with proof that should your offer go through, you’re in a position to actually buy. 

In some cases, say, if you’re in a very competitive market, you may want to look into pre-underwriting, which takes it a step further. However, pre-underwriting (like regular underwriting) is very time consuming, and if you’re trying to buy a house quickly, this may not be strategic or even necessary. Most sellers are content with a pre-approval letter. Moreover, not all banks and lenders offer pre-underwriting. 

Up Your Earnest Money

Earnest money is dollars you put down along with your offer to show sellers you are serious about wanting to buy their property. Earnest money typically comprises 1% to 3% of the sale price of the home, according to Rocket Mortgage. For example, if you’re making an offer on a $200,000 home, you can probably expect to put down about $2,000 in earnest money. 

However, it may stand to reason that if you go above the 1% to 3% mark, you’ll stand out in a seller’s mind. After all, who seems the more serious buyer? One who puts down $1,000 or one who puts down $5,000? This is a strategy, however, that you’ll want to discuss with your real estate agent. In my own experience, even in a competitive, fast-moving market, the 1% I put down in earnest money was enough to get me the keys to my home.

Add an Escalation Clause

You know how on eBay you can set up a bid to automatically increase your offer if someone outbids you? Escalation clauses work basically the same way. You can work with your Realtor to set a specific maximum dollar amount.

Consider Waiving Contingencies 

If you’re in an extremely competitive market, you may decide to waive contingencies in order to make your offer stand out. This could mean several different things. For example, you could choose to waive the appraisal contingency or choose to waive the home inspection. This tactic isn’t without its risks—you could waive an appraisal contingency only to find out later (perhaps via your own appraisal) that the home has appraised for a much lower value than what you paid. Or, you may wisely choose to do your own home inspection after you close and move in, perhaps revealing structural or foundation issues. 

Pairing with an expert agent can help you assess whether or not waiving contingencies is a good strategy. If you’re moving into a hot neighborhood with plenty of comps on par with what you offer, for example, or if you’re moving into a brand-new build, the likelihood for low appraisals or home inspection nightmares is probably pretty low. 

Write a Heartfelt Personal Letter 

This strategy won’t always work, but I know people personally for whom it has (I’ve also written about the pros and cons of personal letters). Including a personal letter may help sway a seller, particularly one who still feels an emotional attachment to their home. 

Say they’ve lived in the home for decades and raised their family there. If you’re starting your own family, they may be more inclined to go with your offer compared with a developer trying to buy that same property, even at a higher cost. It may give a seller peace of mind to know you intend to care for the property, not tear it down. Writing a letter about why the house resonates with you, what you love about it, and your own situation could add a special leg up in some cases.