Parts of a real estate offer

General Advice

NOV 30, 2022

While shopping around for your new home, you've probably been faced with scenarios where the house you love has multiple offers to choose from. The question that's always asked is: how do we stand out? 

To better understand how to improve your offer, it's best to first dissect what actually goes into an offer. Contrary to popular belief, the offer price isn't the end-all when it comes down to a seller making a decision.

Presentation & Acumen

A lot of end buyers don't necessarily think about this too much because they're not exposed to the inner workings of a transaction. However, your agent's presentation style and overall acumen come into play when it's time to submit an offer - who you work with absolutely matters. As a buyer, you have to ensure that the agent you pick has a degree of professionalism and communication style that puts your best foot forward to the seller and their agent. For example, your agent should know that the best way to submit an offer is via email (not text or voice), and that it's always smart to call ahead before submitting an offer out of the blue.

Along with your agent's presentation & style, your overall style also matters. When viewing a home, chances are you'll come across the listing agent (or even the seller!) and you don't want to be the person that shows up smelling like sweat and covered in mud. People will remember how you made them feel, and how you treated their home when it comes down to making a decision.

Offer Price

Of course the offer price matters a lot when it comes to putting your best foot forward - but context matters more. For example, if the comparable homes in the market are selling for $100k, and you submit an offer for $50k... how seriously do you think the seller will take your offer? Often times, buyers (especially first timers) will feel that as long as their offer price is the highest, the seller will accept. However, the seller and listing agent aren't just motivated to get the highest dollar amount: they're aiming to pick the offer that gets closest to their price AND has the highest likelihood to close.

Here's where context starts to matter more. For example, let's say your offer price is slightly below the asking amount - BUT you're paying in all cash vs. the other offers that are above asking and are putting down anywhere from 5-20%. As a seller, what option do you think you would pick? It depends on your timeline and needs as well.

Down Payment

Similar to the offer price, your downpayment amount is also one of the most important components of your offer. However, context matters again. As an end buyer, you have to decide (along with your agent) how to tweak the parts of the offer that you can best control. For example, let's say your pre-approval maxes out at $100k but you want to really stand out from the rest of the crowd - if you know you can come up with a larger downpayment, that would be an ideal lever for you to pull.

Put yourself in the seller's shoes if you had to pick between two options: Option (1) $100k offer at asking price, with 5% down. Or option (2) $90k offer, with 50% down. As a seller, you would take sometime and think about whether it's worth picking option 1 over 2. Although option 1 nets you more money, you're going to have more confidence in buyer #2 because she's putting more money down and will likely have an easier time getting approved by her bank.

Pre-approval Amount

An often overlooked component of an offer submission is the pre-approval document. When submitted with your offer sheet, the pre-approval letter shows the seller's side that the bank has done a soft review of your credit & financials and believes you can get approved for the loan. Although all offers are required to be submitted with a pre-approval letter (unless it's an all cash purchase), not too many people understand that they can also be leveraged further.

As a rule of thumb, even if your offer price is much lower than your maximum qualification amount, you should still request a pre-approval letter with your maximum possible approval to submit with the rest of your offer. There's an important reason for doing this because although your approval chances don't change at all whether your request a letter that has your exact offer price vs. your max approval - psychologically, the seller's side will feel more comfortable if they see your approval amount is much higher than their asking price.

Take the example of the seller, once again, having to pick between 2 separate options: Option (1) $100k asking price, with a pre-approval of $100k and option (2) $100k asking price, with a pre-approval of $150k. What option do you think the seller will feel safer picking, assuming everything else is the same? The seller's side will feel more confident with buyer #2 because they believe that there's a bigger margin for them to work with.

Proof of funds

A buyer's proof of funds is probably one of the strongest "real" indicators to the seller's side. Although an offer price, downpayment, and pre-approval amount all come into play - the proof of funds is what the seller can see as the amount of liquid cash you have sitting in your accounts. Most smart listing agents will require a proof-of-funds to be submitted along with the rest of the supporting documents of an offer, because the more funds you have liquid on-hand, the stronger signal it sends to the sellers on your ability to close.

Contract Signing % (Earnest Money) 

The earnest money willing to be paid up front is also another strong indicator of how "serious" a buyer is with their offer. Since the deposit amount is kept in escrow with the attorney (or sometimes broker), the seller has peace of mind knowing that if the buyer were to back out without reason - the seller would retain the deposit funds. Although different regions have varying standard earnest money guidelines, typically 10% of the overall offer price is the norm in NYC and surrounding markets.


Often times, even when leveraging as much as you can tweak with your offers - sometimes you still need an additional edge to stand out further. Contingencies come into play when you absolutely want to drive the message home to the seller that you're incredibly serious about your offer. A lot of common contingencies include: financing, inspection, appraisal, closing date, and sale of previous home. Typically, my advice to most buyers is to never waive the inspection contingency unless you're already absolutely certain there's nothing wrong with the home. However, the other contingencies are tools in your arsenal that can be adjusted in order to gain favor with the seller and put your best foot forward.

Knowing all the above information, take a look at the options below. Which would you pick as the seller, if your asking price was $140k? 


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