Searching for the right house can be an exhausting process for many buyers.  When you finally find it, you’ll still have many steps before the transaction is complete.   The first step is making an offer.  Here is some useful advice we always share with our buyers on how to make an offer more attractive to sellers from their point of view.

Make a Realistic Offer

Making a realistic offer based on market values demonstrates that you’re a serious player and not looking to jerk the sellers around.  A lot of buyers think they should low ball and come in under the asking price.  While this is possible in various situations, you want to make sure that your offer is realistic and that you don’t turn off the seller. Proper market research allows us to determine what is realistic while also providing comparable data to support your offer.  Remember, knowledge is power.  This is one of the many reasons why it’s beneficial to work with us as experienced buyers agents.

Cash Vs. Financing

You should know in advance whether you have the ability to make a cash offer or if you’re financing your home.  If you’re making a cash offer, you’re likely to have an upper hand in negotiations.  Cash transactions close faster because you don’t have to deal with banks or any of their requirements. If you’re competing against other offers that are contingent on financing, the seller might accept yours simply because the transaction will close more smoothly.

However, if you know you’re financing your home, there are some steps you can take to stay competitive with your offer.

Pre-Approval Letter

Getting pre-approved by your bank is very important in any situation and will help you in different ways.  First of all, it will help you understand how much you’re approved to borrow, which will dictate your budget and what houses you look at.  Secondly, by having a pre-approval letter from your lender and including this letter in your offer, sellers will know you are serious, motivated and that your offer is real.


Pre-Underwriting is when a lender puts a loan application through a more rigorous vetting process before the buyer even enters into contract.  This would typically be completed after choosing a house and having your offer accepted, but before a contract is in place.  Pre-Underwriting helps put a borrower in the same position as a cash buyer. To learn more about pre-underwriting and how it can help your offer, read our blog post Competing With Cash: Pre-Underwriting.


Most buyers make offers contingent upon financing and inspections, which is very reasonable.  However, if you’re up against other offers and are really serious about getting your offer accepted, you can waive these contingencies.  This would obviously expose you to greater financial risk.  However, in a hot market where listings receive multiple offers, sellers will often pick the highest offer with the fewest contingencies.  Here are some of the most common contingencies:

Financing Contingency

A financing contingency is a clause that states your offer is contingent upon securing financing. If you’re financing this transaction, you’ll obviously want to make sure the bank will lend you the money to do so.  Pre-approval, which we discussed earlier, is a general commitment to lend based on your creditworthiness. A financing contingency allows the buyer a certain amount of days to apply for a mortgage and secure a loan.  (Pre-Underwriting can help you ‘unofficially’ qualify for a loan before signing a contract, allowing you to waive this contingency with less risk.) Financing is also contingent upon the property appraising at a certain minimum value.  A seller’s listing price doesn’t determine the value of a house.  A professional appraisal does.  An appraisal protects a buyer from paying for more than a property is actually worth.  It’s also required by most lenders and insurance companies.

Inspection Contingency

An inspection contingency is a clause that states your offer is contingent upon a home inspection. While you and your real estate agent will walk through the house to make sure it’s in sound condition, there are things that are difficult to visually assess.  These include, for example, the property foundation, HVAC system, plumbing infrastructure and so on.  A professional home inspector will look at every inch of the property and let you know if anything is in disrepair or if any major improvements will need to be done within the next several years.

Earnest Money

One of the easiest, yet most powerful things you can do to show a seller you are serious is by leaving earnest money.  This is a basically a good faith deposit.  You’re telling the seller “I’m serious about buying this house that I am going to put my money where my mouth is!”  If the seller accepts your offer, this earnest money is held by a third party in escrow (title or real estate company) and eventually applied to your down payment/purchase.  If your offer does have contingencies that aren’t met, your contract can be terminated and the earnest money, in most cases, is returned back to you.

Closing Date

By taking many of the steps we’ve discussed, you can prepare yourself to move quickly through the home buying process.  Make a point to schedule the earliest possible closing date (unless the seller prefers something later) and specifically include this in your offer.  This will, again, show the seller you’re motivated.

If you’re looking to buy a home in Rochester, MN, please give us a call we can go through the home buying process more thoroughly and answer any questions you might have.