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How To Write An Offer To Purchase A Home

Certified Mortgage Advisor
NMLS 1701021
February 7, 2020

Write that offer!

Let's talk about how to write an offer to purchase a home. So how do you structure your offer to make sure that the seller accepts it? Also, I'm going to talk about how to get into kind of the sellers' psychology to make sure that you can win that house as quickly as possible and with the best terms possible.

So really quickly you can also have a free PDF called the Seven Proven Ways to Save Thousands on Your Home that you can download as well.

How to write an offer to purchase a home

We're going to go ahead and dive into all the things you need to know, as well as some of the psychology of what you need to include to make sure our offer gets accepted.

You need to know loan numbers

You need to know your loan numbers. And what I mean by that is you need a prequalification from a lender and you need quotes. There is no point in writing an offer on a home. If you have no idea what those numbers look like, right? If you have no idea what you can get approved for how much your monthly payment is going to be, what kind of costs are associated and what your down payment needs to be.

You have to know those numbers upfront that way, you know what you can negotiate. Because you can come into a contract and put any numbers you want down, but unless you know exactly what's going to work for you in your family, there's no point in writing that offer yet because you don't know how those numbers are going to impact you. This whole contract is going to be based on numbers that impact you and your. And what you're going to have to bring to the closing table, what your monthly payment is, and your total cost over a period of time. So make sure you get pre-qualified with a lender and you have quotes. So you know what your numbers look like, so you can negotiate well.

Get advice from your realtor

Don't just feel like you have to go at this alone, get their advice on what does the market look like? What kind of offer in terms is going to work well for you moving forward to actually win this.

Price and trade-offs

Also, you want to consider the price and the trade-offs. One of the biggest things that people focus on in a contract is obviously the purchase price. How much are you purchasing the home for? And often what happens is you see a home for $200,000 and you want to go write an offer for 195 or 190. You want to try to get the best price.

But a lot of people don't consider that price also has trade-offs with it. They go hand in hand. And what I mean by that. If you go a lower price you have less of a chance of getting an offer accepted. If you really want a home, don't fight over three grand or five grand or whatever in the purchase price. If you really want a home act like it, pay what you need to pay to get that home. And if you lowball and a seller, you can't be upset when you don't get that offer accepted.

Earnest money deposit

An earnest money deposit is like good faith money that you're going to put upfront. Once that contract is accepted to sell, tell a seller, hey, we're serious about his home. And what happens with earnest money is that it's basically tying up that money with one of the realty companies.

And if you back out of that contract without having a good excuse, basically that money gets tied up for a couple of years. So earnest money shows the seller, Hey, we're serious about this. I would talk with your realtor. What do you want to do with earnest money? Sometimes it's not always great to have earnest money in that deal. And it's ideal for you as a buyer to not have any earnest money, but it is there as leverage if needed.

Financing terms

Also in your offers, you're going to rate financing terms. So you're going to spell out what kind of financing you're using. Whether it be conventional or FHA, USDA, VA, or maybe a portfolio type of loan.

You want to tell the seller what type of financing you're using because different types of financing have different attraction levels to sellers. Conventional and cash are the most attractive to a seller, right? Cash is the most attractive than conventional government-type loans like FHA, USDA, VA, and then portfolio.

And different types of loans have different requirements for an appraisal. So a seller is usually going to go with a conventional deal over an FHA deal. So you know that if you have an FHA deal or a VA deal or a USDA deal, then you need to make sure that your terms are more attractive than someone with a conventional deal.

So if you have an FHA deal, you might have to pay a little bit more, or you might have to ask for less and correct.


Also in your offer, you'll be writing out contingencies for things like how long you have to get financing for your loan, how long you have to do an inspection of the property, and submit a post-inspection request and contingencies for the appraisal saying, Hey, this appraisal needs to come in at value or higher.

And if it doesn't, then we're going to back out before.


Also, you're going to define occupancy. Occupancy is how long after you close on the house you exchange keys. Occupancy is all about keys. And sometimes what happens is you close on a home, but the seller needs a week or two to move out of the property. So you might close on the house, but not move in or exchange occupancy until a week or two.


Also, you'll be negotiating fees. So things like taxes, insurance, and any credits from the seller. So in your contract, you're going to negotiate all that right up front, who pays, what fees, how much do they pay.

And one of the biggest things to focus on is these credits because this is what's called seller concession. This is how much the seller is going to pay towards your closing costs as a buyer. And we'll talk about that on the next page here.


Also, you're going to be talking about the things that stay with the home. These could be things like a refrigerator, a microwave, and an oven. All of those things are not assumed to be included with the property. Those need to be defined that they are going to stick with the. The only thing that's actually going to stick with a property on a non-defined level, meaning you don't have to mention that they're going to stick or things that are actually secured to the property itself.

So things like a microwave, a stove, or those are not included with the property. You have to define that in your contract and say, we want to make sure these things stay. Otherwise, the seller can take them with them. And if you didn't put it in the contracts there's nothing you can do to get those things back.

So make sure that you talk with the realtor about what items need to stay with it. And here is where you can negotiate. Hey, we want to keep the washer. We want to keep, maybe they have a riding lawnmower that you want to keep. Maybe there are other things that you want to attach to that property. I've even seen people on. Stereo systems or electronics or other things. Those are things that you can negotiate in this current.


Also you're going to negotiate the expiration. So one of the biggest things is the contract closing date. When are you scheduled to close on the deal? But then also you're going to submit an expiration for the seller to respond.

So when you submit this offer, you're going to say, Hey, we want to give the seller X amount of days to respond to us, either with saying, they're going to move forward with the contract or they reject the contract.

Review in-depth

And then finally what you want to do. After you've talked with your realtor about what you're setting up in this contract and they draft it for you. Review it, actually read it line by line. There are a lot of pages. It really won't take you that long. It probably will take you 30 minutes tops to review that contract, but make sure you know all these details. I can't tell you how many times I talk with them. And they're asking questions about how their contract was set up and they weren't even aware of credits that they're receiving or things that they have to pay.

They're not aware of dates or contingencies. These are things that drastically impact your deal, make sure that you review it in depth. What's going on.

Psychology of how we're setting up

Now let's talk a little bit more about some of the psychology of how we're setting up this. Because keep in mind real estate, it's not like retail where you can go purchase something off a shelf. You were in a competitive market where people are bidding for a home. So you need to set it up in the best way possible to win the house.

Don't pretend that you don't like it

So if there's a house that you really want, don't act like you don't want it with your offer. I see this all the time where people say, I love this house. I love this house. And then they go low by 20 grand.

If somebody beats you out on that deal, you're just gonna have to live with the fact that you lowballed, that offer. If you really want the house, show it with your offer. That's the only way that you can show the house. So we have to understand the once between you and the seller.

You and the Seller

Most of the time, people don't realize you and the seller wants very similar things, right? You as the buyer want a low price, the seller wants a high price. So immediately you're in conflict. One of you wants a low price. One of you wants a high price, and now you're trying to figure out what's the remedy that we can do to get to the same terms because you both want to sell.

High and low credits

Also, you, as the buyer normally want some high credits. You want the seller to pay for closing costs. You want them to pay tax prorations. But the seller wants a low credit. Again, you want high credits, they want low credits and you're trying to figure out how do you negotiate in the middle.

So you're at a bit of dissonance here, this contract, and the way you write your offer is how you're going to pitch. This is the remedy that you're proposing, right? Because you're both at this dissonance and your contract is the thing that or your offer is the thing that's going to help you suggest the solution for that.

Quick move

Something that you both want is a quick move, right? You, as the buyer want to get into the home quickly and the seller wants to move out of the home quickly. So you're on the same page there, which is great. You can use that as leverage in your offer.

No repairs

Then also, you both are looking for no repairs, right? The seller doesn't want to have to fix anything. The buyer doesn't want to have to fix anything or pay for anything to be fixed. Same thing there you're on the same page.

You should be both win

So your offer is really your suggestion on, Hey, we know that you want this and we want this. So our suggestion through this offer is here's everything that we are suggesting as a way to remedy. So it's a win-win for both of us because a contract does not ever go through unless it's a win-win right. I don't think people realize a lot.

A lot of times I see buyers thinking that they have to get one up on the seller. Never goes through. If the buyers are winning and the seller is losing and same way around a contract, never goes through. If the seller is winning and the buyer is losing contracts, only work.

If both parties have a win-win situation because a seller is not going to sell unless they feel like they're winning a buyer's not going to buy unless they feel like their winning. So your offer needs to be a win-win situation.

You need to have some diplomacy there, not feeling like you're going to try to win one upon the seller, because if they feel that way, then the offer's not going to go through.

Main points for the seller

So the two main points that you need to consider in your offer is that there's, we went through a big list of a lot of things that you're setting up, but really the main things are your price and your credits. The reason why those are mainly important is these are the two big things that impact the seller.

So these are all about the seller here and the kind of the seller psychology. So we know that. They're looking at the price, how much they can sell the home for minus any credits is going to give them what they can net from the property, and keep in mind, they have other costs. They have a mortgage at that, that they have to pay off.

Price and credits

So they have a number that they're looking for, that they need when they sell that property. So you with price and credits are going to be able to provide them with the money that they need to sell the home. And hopefully in a scenario that helps you buy that house for the price you want.

Pre-qualification or pre-approval from the lender

Two big things that you can include to help push a contract acceptance in your favor. Number one is having a solid pre-qualification or pre-approval from a lender. A seller wants to see that, Hey, you actually have the funds and the ability to purchase this home.

They don't want to go through the entire process and inspections and all of this, and then you get denied by a bank or a lender. So make sure that you have a pre-qualification or a pre-approval letter. They're pretty interchangeable. They're basically the same thing. So have a pre-qualification letter also, write an offer letter.

Offer letter

An offer letter is going to appeal to the emotional aspects of the seller. And help them understand a little bit more about why you want to purchase this home and why should they accept your offer among all of the other offers that they've been receiving.

This will separate you from the rest

What an offer letter really does is it helps separate you from the rest of the numbers. Because all they're looking at is black and white contracts with a bunch of numbers that they're trying to figure out. But if yours has an offer letter and a picture of your family and an emotional appeal to help them understand why you want to live in this property, then yours, all of a sudden stands out amongst all the other offers.

If you want to learn more about offer letters and how to write them, you may check this link: How to write an offer letter. This video is going to tell you all about offer letters, how to set them up a template for how you want to write them, and to make sure that you can win this home and have a really solid appeal.

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Kyle Andrew Seagraves is Federal Mortgage Loan Originator (NMLS 1701021) licensed in all 50 states with the Dan Frio Team at Allied First Bank (NMLS 203463), an Equal Housing Lender. Separately, Kyle owns Win The House You Love LLC, an education company. Win The House You Love LLC is not a lender, does not issue loan qualifications, and does not extend credit of any kind. This website is only for educational usage. All calculations should be verified independently. This website is not an offer to lend and should not directly be used to make decisions on home offers, purchasing decisions, nor loan selections. Not guaranteed to provide accurate results, imply lending terms, qualification amounts, nor real estate advice. Seek counsel from a licensed real estate agent, loan originator, financial planner, accountant, and/or attorney for real estate, legal, and/or financial advice.

Allied First Bank is not affiliated with the VA, FHA or any other government agency. This site has not been approved by any government agency.
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