A basic guide to making offers in real estate

by Thomas Scanlan 05/06/2024

While buying a home might seem as simple as paying the asking price, knowing the ins and outs of making offers is crucial to buyer success. Everything from the terms of your mortgage loan to eventual closing costs can affect the amount you spend on your home, and making the right offer can significantly affect your chances in a competitive market.

Here are some of the basics of making an offer on a house:

Find the right home for you

Start by searching online listings for properties to view, or book a tour with an agent. The more knowledgeable you can be about the property, its location and history, the more informed your offer will be. And don't forget, your real estate agent can use their expertise to guide you every step of the way.

Write your initial offer

When it's time to make your first offer, consult your real estate agent for help choosing a starting price. Consider your own budget as well as the local market, home condition and seller situation.

Decide your earnest money offer

An earnest money deposit is an upfront amount of money included with your initial offer on a house. It's used as a sign of good faith, and also a form of insurance for the seller in case you back out of the sale. 

Typically, the expected amount for this deposit is between 1% and 3% of the home's purchase price. However, if you're in a highly competitive market, it can benefit you to offer up to 10%.

Consider your contingencies

A contingency is a provision in your offer which protects your interests in case the unexpected happens between your offer on a house and closing. This allows you to withdraw your deposit under agreed upon circumstances.

One standard contingency example is a home inspection contingency, which allows you to back out of the sale without loss if the inspection uncovers any major problems with the property.

Real estate agents can help you decide what contingencies could work best in your favor. Depending on whether you're in a seller's market or a buyer's market, some strategies might work better than others.

About the Author
Author

Thomas Scanlan

Welcome to my website, your number one source for Belmont, MA Real Estate, Watertown, MA Real Estate, Waltham, MA Real Estate, Arlington, MA Real Estate, Cambridge, MA Real Estate, Newton, MA Real Estate, Brighton MA Real Estate, Allston MA Real Estate, Medford MA Real Estate, and surrounding towns.

 As the owner of Middlesex Residential Properties, I have a diverse background in the real estate field. My experience includes: real estate appraising, and mortgage loan origination. Also, I am a licensed Massachusetts real estate broker, as well as a long time landlord.
 

As a Boston native for my entire life, I have a strong understanding of the Greater Boston area, as well as many of the neighborhoods within. My educational background includes: a Business degree from the School of Management at Boston College. And as the son of a broker, you could say that real estate is in my blood.
 

Buying or selling your home can create some obstacles is one is not prepared. By working with me, you will receive all the honesty and professionalism that a real estate broker can provide for, I am a member of the Greater Boston Association of Realtors and work under a strong code of ethics and integrity.
 

Feel free to call me anytime with any of your real-estate needs. My website services include a comparative market analysis for interested homeowners that want to find out the current value of their home. Also, email members can receive free market summary of specific towns they
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Any property you see via this service is a property that I will be happy to show you.
 

Once again, thanks for visiting my website and I look forward to hearing from you.