Making an offer on a home: a checklist

Making an offer and winning acceptance are the two parts of securing a contract when buying a home.

Knowing what makes a competitive bid for a particular home is key to negotiating success.

Here are some tips.

Take the time to research market conditions so you know what a fair offer is.

• Review your budget based on the amount of your prequalification or preapproval.
• Review your comparative market analysis prepared by your agent from the last 90 days on the price of the home you've picked.
• Check the accuracy of your comparative market analysis through a home valuation report provided by Homes.com.
• Review whether the price on the home has dropped and how long it’s been on the market.
• If it's dropped and has been on the market for a while, you might consider offering below the asking price.
• If there's a bidding war, you may have to consider offering above asking price.
• If the offer is competitive — and you can afford to do so — consider adding an escalation clause stating you would pay more than the highest proposal, usually in $1,000 increments, up to a maximum price.
• If the offer is competitive, you also can consider waiving contingencies or clauses that would nullify the sale if certain conditions were not met. For instance, a buyer could back out if the appraisal were to fall below asking price, if their financing fell through or if an inspection showed that expensive repairs were needed.

The offer should include details of the parties involved and provisions that are important to you.

• Names of the buyers and sellers
• The address of the property
• Financing details
• Amount of offer
• Earnest money or deposit, usually 1 to 3% of the purchased price, which is deposited in an escrow account
• The inspection period, usually 10 to 14 days
• Contingencies
• The closing date, usually in 30 to 45 days
• Date the offer would expire
• Responding to the seller

If the seller doesn't accept your offer, here are some things you can do.

• Revisit your price, contingencies, repair demands, closing date and earnest money with the seller and negotiate the terms that work best for you and them.
• If you can’t reach an agreement — and you still love the home — wait to see if the deal falls through with the other buyer. If it does, ask your agent to resubmit your bid.
• If you’re still not able to reach an agreement, walk away.
• If you do reach an agreement, finalize the contract.

More on this topic:

• Buying a home in 10 steps
• Mortgage preapproval is your first step to homeownership
• What can you negotiate for during a sale?
• Contingencies can protect buyers from nasty surprises
• 10 essential tips for first-time homebuyers
• Understanding closing costs: What to expect and how to prepare