Researching Fair Market Value
Before writing a single number on paper, your agent should pull recent — properties similar to your target home that sold nearby in the last three to six months. are the clearest signal of what the market actually says a home is worth, independent of what the seller is asking.
Compare the right attributes
Square footage, lot size, bedroom and bathroom count, age, and overall condition. The closer the match, the more reliable the comp.
Look at days on market
Homes that sold quickly suggest strong demand. Homes that sat for 60+ days before selling often did so at a discount — and reveal something about how buyers perceived the value.
Check whether comps sold above or below asking price
In hot markets, homes routinely sell over list. In slower markets, discounts are common. Knowing this pattern for your specific area prevents you from overbidding — or missing with a lowball offer.
Factor in upgrades and deferred maintenance
A recently renovated kitchen adds real value. Aging HVAC, a worn roof, or an outdated electrical panel should lower your offer relative to updated comps.
Core Components of an Offer
A is a legally binding document that covers much more than price. Every element can be negotiated, and every element sends a signal to the seller.
| Component | What it covers |
|---|---|
| Purchase price | The dollar amount you're offering to pay. |
| Earnest money | A good-faith deposit (typically 1–3% of price) held in escrow until closing. |
| Financing terms | Loan type, down payment amount, and pre-approval documentation. |
| Contingencies | Conditions that must be met for the deal to proceed (inspection, financing, appraisal). |
| Closing date | Your proposed timeline to finalize the purchase. |
| Included items | Appliances, fixtures, or furnishings you expect to stay with the home. |
| Seller concessions | Any requests for the seller to cover a portion of your closing costs or make repairs. |
Common Contingencies Explained
Contingencies are conditions built into your that give you the legal right to back out and recover your if something specific doesn't check out. They protect you — but they can also affect how attractive your looks to a seller.
Inspection contingency
Lets you back out — or renegotiate — if a professional inspection reveals significant issues. This is the contingency most important to preserve, especially on older homes.
Financing (mortgage) contingency
Protects your earnest money if your loan falls through despite a good-faith effort to secure financing. Essential for financed purchases.
Appraisal contingency
Allows you to renegotiate or exit the deal if the home appraises below the agreed purchase price, protecting you from overpaying relative to what the lender will finance.
Home sale contingency
May weaken offerMakes your purchase contingent on selling your current home first. Sellers often view this as risky and may decline offers that include it.
Balancing protection and competitiveness
Waiving contingencies can make your offer more attractive in a hot market, but each waiver increases your financial risk. Talk through the specific trade-offs with your agent before removing anything — especially the inspection contingency.
Strategies for Competitive Markets
In a with multiple offers, price alone rarely wins. Sellers weigh certainty, convenience, and timeline alongside the dollar amount. Consider these additional strategies when competing.
Offer above asking when comps support it
If recent comparable sales support a higher price, offering above list can be financially justified — not just emotional.
Shorten the inspection period
Reducing the inspection window from 14 days to 5–7 days signals urgency and commitment without fully waiving the contingency.
Include an appraisal gap clause
Agreeing in advance to cover some of the difference if the home appraises low removes a seller's biggest source of uncertainty.
Be flexible on closing date
A seller who needs 60 days before vacating will strongly prefer a buyer who accommodates that timeline.
Increase earnest money
A larger good-faith deposit signals seriousness and financial strength. It doesn't cost you more — it just shows more commitment up front.
Write a personal letter (where permitted)
Some sellers respond to a short, genuine note from buyers. Note: some states restrict this practice for fair housing reasons — ask your agent.
Earnest Money Explained
is a deposit you submit with your to show the seller you're serious. It's held in an — typically by the title company or a brokerage — and applied toward your down payment or closing costs at the end.
1–3%
Typical earnest money range as a percentage of purchase price
Returned
If you exit for a reason covered by an active contingency in your contract
At risk
If you back out without a valid contingency — the seller may keep the deposit
Wire fraud warning
Always wire earnest money using instructions confirmed by phone directly with your title company — using a number you looked up independently. Never send funds based on wiring instructions received only by email. Real estate wire fraud is common and the losses are rarely recoverable.
What Happens After You Submit
Once your is in, the seller typically has one of three responses. Most sellers reply within 24–72 hours, especially if a deadline was included in your .
Acceptance
The seller signs as-is and you move to being officially under contract. Congratulations — the purchase process now begins in earnest.
Counteroffer
The seller proposes changes to price, terms, or timeline. Your agent will help you decide whether to accept, counter again, or walk away.
Rejection
The seller declines — often because a competing offer was stronger. Your earnest money is returned and you continue your search.
What Should You Do Next?
When your offer is accepted, the contract period begins. Understanding what happens between acceptance and closing keeps the process on track.
Under contract — now what?
Timelines · Deadlines · Who's involved · Financial safeguards
Acceptance is the beginning, not the end. A 30–45 day process of inspections, appraisals, underwriting, and paperwork stands between you and the keys.
Under Contract Guide