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Home Offers 101: How to Make an Offer on a House in 2024

Real Estate Advice

by Karen Dybis Posted on February 12, 2024

So you’ve found the perfect place to buy, huh? Now it’s time to figure out how to make an offer on a house that’ll make that dream come true! Sure, making a home offer may seem simple: You work with your real estate agent to come up with a price and then submit it to the sellers. But that’s just the big picture. A home offer also includes elements that you may not immediately take into consideration — such as contingencies, requests for home inspections, and any cost negotiations before settling on that final number.

Did you know? This is the third article in our series on buying a home. If you haven’t already, check out the first two articles:

What to Consider and What to Look for When Buying a House in 2024
Want to Stand Out From the Competition? Learn How to Write a House Offer Letter

With this in mind, you’re likely to have questions about the process of making a home offer, and that’s normal. Let us save you some panic and help to get you prepared.

We’ve compiled answers to some of those questions, covering topics like whether you can make an offer on a house without preapproval, deciding how much house you can afford, and thinking through the process of writing a home offer letter to the homeowners. You should also be prepared to know what contingencies you’re comfortable asking for — maybe you want a fast closure or prefer to skip home inspections.

In the housing market, competition can be fierce and homes can go under contract very quickly. That’s why the negotiation process is so important and why writing a well-written home offer letter really matters. It’s also why you’ll want to have most, if not all, of these decisions made as early in the game as possible.

Let’s get started.

What Do You Need To Have in Place Before You Make a Home Offer?

In short order, you need several things to be ready to make a home offer on your dream abode.

Payment Method

You need to be preapproved by a financial institution for a mortgage or home loan, or you have to have the cash in hand to make the payment in full. Otherwise, your offer will go straight to the rejection pile.

Agent

Decide whether you want to work with a real estate agent or go solo. Making an offer on a home without an agent is certainly possible, but having a pro by your side gives you a massive advantage in figuring out what to offer on a house.

Price

How much do you want to pay for the home? Be sure to get the necessary paperwork in front of the seller. 

Down Payment

You need to think about how much down payment you’re able to make, and a house calculator can help you with that decision. 

Did you know? Once you’ve found the house you want, the home-buying process can typically be completed within a month! 
A man in a button-down shirt is sitting at a desk using a calculator. He is holding a pen over a large stack of papers, and there is a small model of a house sitting nearby on the desk.

How Do You Get Started Making an Offer on a House?

The first step in how to make an offer on a house is the easiest one: You have to decide that it is time to buy. For first-time home buyers, this is the moment of truth. That means setting up a budget to know how much you can afford, deciding whether to work with a real estate agent, and figuring out what neighborhood or city you want to live in. Eep!

Once you have those items settled, go online and use a mortgage calculator to determine how much house you can buy, based on your income and any debt you may have. Look with your real estate agent or go onto a reputable home-buying website to see how much homes are selling for in the particular neighborhood where you’ve found your perfect home.

Next, think about your timeline: Do you need to move right away, or can you wait for the current homeowner to find a place? Can you avoid contingencies like a home inspection, or do you want certain contingencies to make sure the home is ready to move into — and a wise investment, for that matter? 

Q: What is reasonable to offer below asking price in 2024? 
A:
That depends on several factors, such as the condition of the home and how close it is priced to the market value. Of course, you don’t want to offend the sellers with an extremely “lowball” offer, as it may get you kicked out of the game altogether. Talk to your real estate agent, who will have the expertise to interpret the signs your offer will be accepted on a house. They’ll help you determine exactly how to make an offer on a home — and how low you can safely go.

How Do You Make a Good Offer on a House?

It’s the question everyone wonders: How much should you offer on a house? But the answer is tricky. You need to determine how much you can afford to spend on a house that you may have fallen in love with or is in an area where you want to live — or both! If this is The One, then you will want to make a house offer that is at least near the asking price — perhaps within 5 percent to 10 percent. For most sellers, coming in close to what they want to get and what the market bears for that particular home is considered a good offer. 

You may be wondering, however, when it comes to a competitive housing market, “How much over asking price should I offer?” The answer: You may have to go at least 5 percent to 10 percent over the asking price — especially if you’re looking in a hot neighborhood or a city where a lot of people are looking to live. 

In the end, what is a fair offer on a house? It’s what you are comfortable paying, taking into account the mortgage rate you received, what your monthly payment will be, and what kind of lifestyle you want to have once you’re moved into the home. 

Insider Tip: This is the time when you may want to write a letter to the home seller that your real estate agent can include in your home offer. This letter should highlight why you want that home, what you like about it, and how you can see your family living there. This tends to make the home seller feel like you will appreciate the home, and your home offer may be taken more seriously if you take the time to write something from the heart. The letter doesn't have to be very long — one or two pages at most is considered ideal — and it’s a good way to preview your formal offer letter for house buying. Check with your real estate agent first, though, to ensure this is a standard practice with home buying and selling in your area. 
 
A happy couple shows off their house keys in front of their newly purchased home.

How Do I Improve My Chances of Getting the Home I Want?

Here’s where things really get interesting. Negotiating a cash offer on a home has proven to be one of the most effective ways to buy a home. Sellers love a cash offer because someone who pays in cash is likely going to make the deal happen. When working with a mortgage lender, delays can interfere or a buyer may fall through, and a seller doesn’t want any setbacks when it comes to moving.

Now, chances are the seller will do something some buyers dislike: make a counter offer — which is when the seller asks you to raise your original offer or change some contingencies. Whether you decide to come up with more money or adjust your offer is up to you. But if you are committed to that house, you may want to provide the additional funds or make the necessary changes to get you to the finish line — that is, the closing table, where you sign the papers that will make the home yours. 

How Do You Make an Appropriate Offer on a House?

The answer is somewhat simple: Carefully. What does that mean? Basically, it means you need to throw away what you see on television and realize that you’re working with real people and real money. In other words, you need to know how to make an offer on a house that is respectful, sensible, and something both sides of the process can accept with some amount of happiness. 

Think you can “lowball” it and offer half of the asking price? That’s both insulting and unrealistic. Rather, you need to evaluate many things about a home, its neighborhood, and its potential value to come up with a reasonable price that you’re willing to pay. 

The home itself is where you should start. Does it need major (or even a lot of minor) repairs — a “fixer-upper” of sorts? If so, you can likely drop a certain amount off of the original asking price on what you decide to offer. As far as the neighborhood goes, is it the best house in an up-and-coming neighborhood? That may be something to consider when making your offer — perhaps the house is overpriced because the owners put so many improvements into it. If that’s the case, you might be able to reflect that in your offer. 

A home’s potential also weighs into what you feel is appropriate to offer. If the house needs a lot of improvements to bring it up to the area’s housing value, you might want to talk with your real estate agent about subtracting the cost of those improvements from the seller’s asking price. How to make an offer on a house that’s going to make you pleased and not get outright rejected is a fine art, but your agent is trained to walk you through the process. 

Q: What contingencies should be put in an offer? 
A:
These items will vary, depending on your specific circumstances — and again, your real estate agent is the expert who can help you through all the steps of making an offer on a house. But to get you started, here are three of the most common contingencies:

  • Home inspection: Your purchase depends on whether the house is in good shape or needs any kind of structural repairs.
  • Financing: If you’re unable to secure a loan, this contingency allows you to withdraw your offer without penalty.
  • Home sale: Your deal is contingent upon the sale of your current home.

Should I Be Offering 20K Over Asking Price?

The right answer to this question is going to depend on the market, your budget, and how much you really want to own the house. When you’re wondering how to make an offer on a house, the current market is a huge factor. If the area is highly desirable and the house is completely updated, you may have to go over the asking price — or the bank’s evaluation — to get your offer accepted. 

The final consideration is how much you really, really, really want to own that piece of property and the house on it. If it is the ideal location, perhaps by a lake or near a coveted school for your children, you may want to put in a bid that reaches slightly (or well over) the asking price. That way, your offer is sure to at least get noticed — if not accepted. A generous offer that gives the owners a bit extra is a smart way to start the negotiations, especially if you think there are going to be multiple bids on a home. If your real estate agent recommends you come in with your best offer on the first try, you may want to listen. 

Once you get your offer accepted and negotiations are finalized? It’s time to get moving! Your contract will determine your move-in date, but oftentimes, there will be about one to two months between signing your sales agreement and moving in. 

Don’t leave it all to the last minute! You can get a head start, and save a headache or three, with PODS portable moving and storage containers. Keep one (or more) in your driveway while you pack and load, and when you’re ready, PODS will pick it up and deliver it to your next home or keep it in a PODS Storage Center.


Karen Dybis is a freelance journalist and a frequent contributor to the PODS Blog. Her work has appeared in Time magazine, U.S. News & World Report, The Detroit News, and more.

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