10 Tips for Writing a Great Purchase Offer in a Seller's Market

Seller's markets exist when there are a lot of buyers competing for a low inventory of active listings. It isn't unusual for a home with all the bells and whistles to draw offers from more than one buyer. When this happens, the house often sells for more than list price, but the price isn’t everything to a seller. There are other factors. If you are trying to buy a home in a seller’s market, here are 10 tips to help you write that winning purchase offer and beat out the competition.

Submit a Preapproval Letter with Your Offer


A lender’s letter that says your credit rating has been examined and you can afford to buy the home carries a lot of weight. It tells the seller that you are serious and qualified—you are ready to purchase, and you have already committed to a lender. If the seller has a higher offer from a buyer without a preapproval letter, your offer will likely win.

Hire an Assertive Real Estate Agent

An agent who constantly combs the marketplace and networks with other agents is more likely to get a lead on your new home before anybody else, which is why you need to hire a good agent.

Here is a sample scenario in which an aggressive agent was beneficial. When a young buyer was ready to buy a home they had just toured over lunch, the agent insisted they write the offer on the hood of the car. Then, the agent called the listing agent, persuaded that agent to drop what they were doing and join them at the seller’s home to present the offer. The offer was accepted that afternoon, thanks to quick, assertive action on the part of the agent.

Write a Friendly Offer

Don't include demands on your offer that are likely to irritate or anger the seller. If it is customary in your area for the buyer to pay for their own title insurance policy, don't ask the seller to bear that cost. If most buyers demand possession at 5 p.m. on the day of closing, let your generosity set you apart from other buyers by giving the seller two or three days to move out.

Put Your Best Foot Forward

Simply put, this means "write your very best offer." You might get only one chance to make an impression on the seller, so don't make a low offer in hopes that the seller will give you a counteroffer. If the seller has received multiple offers, the low offers are often not even considered. They are shoved into the rejected pile. Figure out the top dollar you are willing to pay for the home and offer that price.

Put Down a Healthy Earnest Money Deposit

A larger earnest money deposit shows you are serious and are willing to put your cash on the table. Sellers will feel you are more committed if you put down, say, a 3% deposit, rather than a 1% deposit. In other words, if a home is listed at $300,000, don’t offer a $500 deposit. The seller could feel you have nothing at stake. You could easily walk away from the transaction without losing much, and that could make the seller nervous. A deposit of $5,000, $10,000 or $15,000 says “I am committed to buying this home."

Cash Talks

If you can pay “all cash” for a home, say so. This may seem unnecessary, since it's always “all cash” in the end to the seller, even if the buyer obtains a loan. However, this lets the seller know that your transaction is not dependent on receiving loan approval, which makes you a more attractive buyer.

Shorten Inspection Periods

Many standard real estate purchase contracts give the buyer a set number of days to perform inspections before the buyer is required to proceed with the transaction. If the default in your purchase contract is 17 days, try shortening that period to 10 days. By federal law, unless you specifically waive your right under the Lead Paint Disclosure, you have 10 days to inspect the property for signs of lead paint contamination.1

Waive Some Contingencies

If you have spoken to your legal advisor and feel comfortable risking your deposit, you might want to consider waiving contingencies such as those for loans, appraisals, or inspections. However, there are risks to this strategy. If you waive an appraisal contingency and the home appraises below your sales price, you will need to make up that difference in cash. Keeping those potential drawbacks in mind, waiving contingencies can make your offer more appealing than a competitor's.

Write the Seller a Letter

If the seller has eight offers on the table, but your offer includes a letter that is personally handwritten by you, your offer will stand out. In your letter, you will want to appeal to the seller’s emotions by explaining why you are in love with the home. List all the reasons why your offer should win. If you can evoke tears of joy, or induce empathy from the seller, your offer will likely win.

Offer to Close Quickly

Unless there are extenuating circumstances, many sellers prefer to close within 30 days or fewer. If you can offer a 21-day closing time frame, for example, that might give you the edge you need to beat out the competition. For some sellers, closing quickly can be more important than an offer for more money.

Frequently Asked Questions (FAQs)

What are contingencies in a purchase offer?

A contingency in a purchase offer is a clause that says something else must happen (or not happen) before the contract becomes binding. For example, a home inspection contingency states that you can withdraw your offer without penalty if certain things are uncovered during the home inspection. Both you and the seller must agree that each contingency has been met and sign the contract before it is binding.

What is an escalation clause in a purchase offer for a house?

An escalation clause is put into a contract to allow you to increase your offer price if there are other offers higher than yours. The clause states that you will increase your offer a certain amount above competing offers (for example, by $1,000 more) up until you reach the maximum price you are willing to pay.

Who writes the offer to purchase a house?

A purchase offer for a house should be written by someone who is an expert in these types of contracts and negotiations, such as a Realtor, estate agent, or qualified attorney. However, as the buyer, you should review, discuss, and sign off on every part of the offer before it is presented to the seller. If your offer is accepted, it becomes legally binding. You need to know everything that is included in it.

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