Make an Offer

TLDR: Real estate contracts are legally binding agreements, so make sure you understand the components of an offer in order to protect yourself and increase the odds of your offer being accepted.

"I’ve found a house that I want to put an offer on! What happens now?"

Most importantly before you begin this task, you need to ensure you'll be able to pay for the house, which means either having cash available or a pre-qualification/pre-approval letter from a lender. If you haven't already done this, you'll need to go back to Step 1 to start the application process with a lender since this can take a few days. You'll want to have this done before you make an offer to increase the likelihood that your offer is accepted so that you can simply attach your pre-approval letter once you're ready to put an offer on a house that you like.

It is customary to negotiate all of the terms and conditions before signing, so you'll want to familiarize yourself with the tasks in this step to ensure you're well acquainted with the components of an offer before you pull the trigger and make one. If the process of buying a house is a game, you can think of making an offer as suggesting the rules of the game. Signing (even electronically) is legally binding, and you’ll risk losing your earnest money deposit unless you terminate based on one of the allowable reasons listed in your contingencies.

Why are real estate contracts so long?

The reason a real estate offer is so lengthy is to clarify what happens when certain scenarios arise, and to protect the buyer's earnest money deposit from many of the possible scenarios that can play out before closing. What if the buyer can’t get financing? What if the seller won’t make lender-required repairs? What if the appraisal is lower than the agreed upon purchase price? What if the sky is purple on the day of closing? What happens if my dog eats the contract but only pages 47 and 52? What if, what if, what if? The offer spells out what, precisely, will happen should any of these events occur in order to prevent having to go to court. Once both parties agree and sign the offer, it becomes a ratified, enforceable contract.

So, what goes into an offer?

Offers generally include:

The Property

This is the address and any personal property of the seller’s you’d like to buy

Sales Price

The amount you agree to pay for the property

Earnest Money Deposit

The amount you risk forfeiting to the seller if you back out of the contract for a term not stipulated in the contract

Closing Cost Assistance

How much the seller will refund you at closing, which reduces your cash to close

Home Warranty

Similar to homeowner’s insurance, home warranties are insurance against issues inside the dwelling. Depending on the market, the seller will sometimes pay for the buyer’s home warranty


Describes how taxes and fees will be prorated at closing

Real Estate Commissions

Each party will be responsible for his or her own real estate agent


These clauses are the reasons that allow buyers to terminate the contract without repercussions. Common examples include financing, appraisal, and inspection contingencies

Financing Contingency

This contingency allows you to walk away from the sale in the event that you’re unable to obtain financing

Appraisal Contingency

If the property doesn’t appraise for at least the sales price, you’ll be able to terminate the contract

Inspection Contingency

If you and the seller are unable to agree on terms about the repairs that need to be done, you’ll be able to walk away from the sale and still receive your EMD if you have this contingency

Radon Contingency

In the event that radon levels are higher than the recommended limit, you will receive your EMD if you decide to end the agreement

Termite Contingency

Should termites or termite damage exist, you will be able to walk away from the contract

Settlement and Possession

Settlement is the date you legally own the property, and possession is the date you take the physical property. These dates are not always the same, depending the circumstances of the buyer and seller. 

Title and Title Insurance

This section ensures that you’ll receive a clear title before closing. If you’re obtaining a loan, you will likely need to obtain title insurance prior to settlement


This is information provided by the seller about a property that may affect your interest in purchasing the property. Requirements exist at all levels of government and vary from state to state

Homeowners’ Association Disclosure

In Virginia, buyers are permitted three days after receipt of the Association Disclosure Packet to terminate the contract

Condominium Association Disclosure

In Virginia, buyers are permitted three days after receipt of the Resale Certificate to terminate the contract

Other Disclosures

Disclosures required of Sellers varies widely state by state. Disclosures are notices about the property. It’s critical that you read these as these problems become your problems. 

Miscellaneous Terms

Anything else you or the seller would like to add to the contract


This is not generally a negotiated clause. Rather, the buyer has the option before closing to pay a surveyor for a map and legal description of the property.


This is a note to the seller and is not legally binding

Can I back out once I've made an offer?

Before you've signed the contract, you may rescind your offer at any time with no repercussions. Keep in mind that the seller may also decline your offer at any point before you've both signed the contract. After you've both signed the contract, the short answer is "Yes, you may terminate the contract, but whether you get your earnest money deposit back depends on the circumstances under which you back out."

The circumstances that allow you to cancel the contract are called contingencies (sometimes legally required disclosures act like contingencies). Contingencies are stipulations in the contract that must be met in order to proceed with the sale. 

Example of Common Contingencies

Two of the most common contingencies are Financing and Inspection contingencies, which allow the buyer to cancel the sale if they can't secure financing or if the inspection turns up repairs that are unacceptable to you as the buyer. If you can't obtain financing, you almost certainly won't be able to proceed with the purchase, and if you discover in an inspection that the house has foundation issues, you should have the option to back out of the contract. Keep in mind that the more contingencies your offer has, the less attractive it becomes to the seller because of how many "outs" you'll have.

A Note about Terminating Agreements

You can actually terminate the contract at any time for any reason, but if it’s for a reason not stipulated in the contract, it’s likely that you will lose your earnest money deposit to the seller.

How do I make my offer more attractive?

Whether the offer you make will be accepted by the seller depends on a lot of factors. The first and most obvious factor is price, but there are a variety of other terms or conditions that might sway a seller to accept or reject your offer depending on their personal situation. If someone has received a property as an inheritance, they may be more likely to accept a lower offer in exchange for a quick sale and not having to make repairs. If someone is buying a property but must sell a different property in order to close on the one they'd like to purchase, that person may be inclined to agree to a lower purchase price on the property they need to sell in exchange for a quick close.

In summary, you can make your offer more attractive by finding out what's important to the seller: price, selling quickly, cash offer, selling as-is, etc. Something else you can do to show you’re serious about buying is put down a large earnest money deposit, a gesture that indicates you're willing to lose that amount if you walk away for a reason not stipulated in the contract. A typical earnest money deposit offered to the seller is $1,000, but can be up to 10% of the home price in highly competitive markets.

Beware of Making Excessively High Offers

While you might think that offering significantly more than the asking price will guarantee you the house, you should be prepared to pay cash for any amount offered above the asking price. Why? Because the lender doesn’t want to overpay for a property. If you offer more than what an appraiser deems the house to be worth, you'll end up paying the difference out of pocket, unless you have an appraisal contingency that allows you to walk away in the event of an appraisal coming in lower than your agreed purchase price.

What should I do if I want to make an offer on something other than a traditional sale, such as a pre-foreclosure, foreclosure, short sale, auction, as-is property, probate, etc.?

At this time, Aloha My Home doesn't have the ability to make offers on specialty properties like the ones listed above. In time, we intend to make these options available to our customers.

Next Steps

Once you and the seller agree on terms and conditions, the next step is to ratify (sign) the contract. After that, you'll move on to Step 3!