Making a Smart Offer

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Showing Proof that you can afford the home.

If you want to look like a serious buyer, the first thing you need to do is show the seller that you can actually close on the home. This means obtaining a mortgage preapproval (not just a pre-qualification) letter if you plan to apply for a mortgage. If you're a cash buyer, it's a good idea to submit proof of funds along with your offer.

Put your money where your mouth is

The earnest deposit is money that you submit to the seller along with your offer to show that you're serious about buying the home. If you don't fulfill your obligations under the contract, the money goes to the seller. 

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Typical earnest payments are in the $500 to $1,000 range in lower-cost markets but can be as much as $5,000 to $10,000 in higher-cost areas. And to be clear, this is money that eventually gets applied toward your down payment and closing costs. If you want to make your offer stronger, consider offering more of an earnest deposit than is expected in your local market -- your real estate agent can help you with this.

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Offer to close quickly

If you're planning to obtain a mortgage, getting preapproved can certainly speed up the process, but your lender may still require a certain amount of time -- say, 30 days -- to close.

However, it's still a good idea to include the shortest realistic closing time frame you can. If a seller gets three offers, two with 45-day closes and yours with a 30-day close, it puts you at a nice advantage.

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Make a Strong First Offer

If you live in a hot real estate market where most inventory sells within just a few days of being listed, it's not the time to try to score a bargain or lowball the sellers.

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If a home is listed for $400,000, don't offer $350,000 "just to see what happens." If homes are selling for the full asking price or close to it in your area, you'll need to make a strong offer to show the sellers that you're serious. In many cases, if sellers have received (or expect to receive) multiple offers, lowball offers aren't even countered just rejected.

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Show the Seller You Are The Right Person For This Home

Sellers, especially if they've lived in a place for a while with their family, they typically have a sentimental attachment to their home. While they certainly want to get top dollar for the property, they often also want to know that their home is being transferred to good hands. Including a personal note with your offer about how the home would be a perfect place for your children to grow up, how much you love some of the design elements or something else detailing why this would be the perfect home for you could go a long way.

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