A Buyer's Guide: Submitting an Offer

Your financing is all lined up. (You are pre-approvedright?)

You’ve found a house that is just right. What to do, what to do… 

Wait! We know: It’s time to make an offer on your next dream home.

We’re going to break down the process of submitting an offer step by step – no mystery, no big secrets. Let’s just talk some truth, shall we?

Step 1: Comparative Market Analysis

Your team at TRELORA is made up of experts in the field of real estate, and researching an accurate CMA (Comparative Market Analysis) to help you make an informed offer on your property of choice is part of that package. Deciding how much to offer on a property is not a whim – it should be a well-informed decision based on facts, figures and closed sales of similar properties in a similar location. An expert CMA is part statistical analysis and part art, and it is a vital part of the pricing strategy used to craft a strong offer.

Step 2: Consider Contingencies


In the simplest of terms, a contingency is a contractual out that gives you the legal right out of the contract if the terms of your contingency do not come to fruition; in other words – if your contingency items don’t happen, you can bow out and get your earnest money back. Examples include:

  • Financing. As in, you aren’t approved for financing yet but you are still ready to move on this property.

  • Home Inspection. This one’s pretty standard, and we generally don’t recommend you purchase a home without the protection of a thorough Home Inspection. One factor to consider in making your offer is to leave room on the table for potential inspection items. If you offer the lowest acceptable price the seller is willing to take for the home and they go for it – good for you! Be aware this may mean the seller will be less willing to cover items that come up on the inspection, and sometimes sellers will state this (through their agent) at the time the contract is accepted.

  • Appraisal. The majority of the time the property appraises right on track, but on the off chance there is a snafu, you’ll want to be covered. If the house doesn’t appraise at the value of your offer, your lender won’t want to finance the amount you are requesting. And if the appraisal does come in low, it could mean you are overpaying for the property.
  • Property Sale. If your current home is an active listing and you are unable to close on another property without a closing (or at least a contract), this contingency will ensure you are covered if your existing home doesn’t sell. This factor will also come into play when choosing dates throughout the contract.

Step 3: Seek Out the Seller’s State of Mind

Are you in a buyer’s market or a seller’s market? Is the property vacant? Are there children or pets in the home that might make daily “staging” a challenge? Is autumn or winter right around the corner? Do the sellers have a contract on their next house? Are they relocating with a deadline in mind? All of these factors help determine the urgency a seller has to secure a contract on their property, and the more knowledge we can gain before the contract is written, the better. Across Metro Denver the market has favored sellers for awhile now, but there are still ways for you, the buyer, to gain inches here and there at the negotiating table. A bit of detective work into why the house is for sale may give you an edge.

Step 4: Get Out Your Checkbook

For earnest money, of course! The title company often holds earnest funds until the transaction closes, and these funds are just what they sound like – proof of your earnestness in the transaction. Some sellers are okay with a personal check, some require guaranteed funds (a money order or cashier’s check from your bank.) These funds are held in escrow and applied to your down payment at closing. The amount of the earnest money varies depending upon the price range of the property - usually around 1% of the asking price. You can expect to write a check for anywhere from $1,000 to $5,000, and significantly more for a high end listing. Remember – these funds are applied to your purchase when the transaction closes, so you are not losing this money, it will be rolled into your upfront costs of purchasing the home.

Step 5: Submit the Offer


The majority of offers are submitted electronically these days, and often signed the same way. You will likely eSign many of the documents attached to the transaction, and the seller will do the same. This keeps the transaction moving forward quickly and saves a few trees along the way. Depending on whether we write your offer together on a weekday or over a weekend, as well as your urgency to be under contract, the seller will be given 24-48 hours from receipt of the contract to respond, although less is acceptable, such as a same day response requirement. For example, if we write a contract at lunch time on Monday, we may give the seller until 5pm on Tuesday to respond. If the seller signs the contract – congratulations! You are under contract to purchase a home and we’re off to the races.

If they send a Counter Offer, they are likely willing to play ball, but they have amended something in your offer. They may be seeking a higher price, different closing terms or fewer concessions (closing costs, appliances, flooring allowance, etc.) A counter offer is a good thing – not a reason to panic. If you’ve offered significantly below the asking price and the seller came back at full price, you’ll need to carefully consider how much you are willing (and able) to pay for this property.

If the numbers are $30,000 apart, you may not be able to find common ground. If, however, you offered $5,000 below asking price and the seller came back with a full price offer, you might consider countering back at $2,500 below asking price. The risk is the seller will reject your offer entirely, but if your offer is serious and you are not in a multiple offer situation, it may be a risk worth taking, and the seller may be willing to meet you halfway.