Buying your first home is an exciting milestone, but making an offer can feel intimidating. A strong, well-prepared offer can set you apart from other buyers, especially in a competitive housing market where homes can receive multiple bids.
If you’re getting ready to learn how to buy a house, this guide will help you navigate the offer process, understand counteroffers, and make strategic decisions with confidence.
Step 1: Get pre-approved for a mortgage
Before you even begin house hunting, it’s important to get pre-approved. According to the Consumer Financial Protection Bureau (CFPB), pre-approval shows sellers that you’re financially prepared to buy and capable of securing financing. It also helps you understand exactly how much you can afford, so you can make offers within your budget.
FHA, VA, USDA, and conventional loans have different requirements for down payments, credit, and mortgage insurance. Knowing which loan you qualify for can help you craft an offer that sellers take seriously.
Step 2: Work with a real estate agent
As a first-time buyer, having an experienced agent can be invaluable. A good agent will research recent comparable sales, often called “comps,” to help you determine a fair offer price based on what similar homes in the area have sold for. They can also advise you on current market conditions, including whether homes tend to sell above, at, or below the asking price.
Beyond pricing guidance, your agent communicates directly with the seller’s agent to get a sense of how competitive your offer needs to be. This insight can help you fine-tune your approach so your offer has the best chance of being accepted.
Step 3: Decide on your offer price
This is the heart of the process. Your offer price should reflect both your budget and the realities of the market.
- Hot market: You may need to offer above asking or include stronger terms.
- Balanced market: Offering close to list price may be enough.
- Buyer’s market: There could be room to negotiate below asking price.
Keep in mind your maximum approved loan amount and avoid stretching your budget too far. Remember: your monthly payment will also include taxes, insurance, and possibly mortgage insurance premiums.
Step 4: Include key terms and contingencies
An offer isn’t just about price — the terms and conditions matter too. CFPB guidance highlights several common contingencies, including:
- Earnest money deposit: A good-faith deposit (often 1–3% of the purchase price) showing you’re serious.
- Inspection contingency: Allows you to back out or renegotiate if the inspection reveals major issues.
- Appraisal contingency: Protects you if the home appraises for less than the purchase price.
- Financing contingency: Ensures you can withdraw without penalty if your mortgage falls through.
- Closing timeline: Offering flexibility on the seller’s preferred timeline can make your offer more attractive.
FHA and VA loans may have additional property standards or appraisal requirements. Be prepared to explain to your agent and seller how these work.
Step 5: Strengthen your offer in a competitive market
In multiple-offer situations, small details can make a big difference. One option is to increase your earnest money deposit, which demonstrates to the seller that you are committed to moving forward with the purchase. You might also limit contingencies to streamline the process, though it’s important to keep enough protections in place to safeguard your interests.
Some buyers choose to write a personal letter to the seller, particularly in markets where this practice is common, though you’ll want to be mindful of fair housing laws when doing so. Flexibility on closing dates can also work in your favor if the seller needs additional time to move or finalize their own purchase.
Step 6: Responding to counteroffers
Sellers often counter an initial offer, especially if there are multiple buyers. A counteroffer may adjust the price, change the closing timeline, or alter contingencies.
When faced with a counteroffer, you have three choices:
- Accept the terms as written.
- Reject the offer outright.
- Counter back with new terms.
Stay calm during negotiations. It’s common for back-and-forth to happen, and having a clear budget limit in mind helps you avoid emotional overspending.
Step 7: Know when to walk away
As a first-time buyer, it’s easy to get emotionally attached to a home. But sometimes the best decision is to move on if the terms don’t align with your budget or financial comfort zone. Walking away can feel disappointing in the moment but may prevent long-term financial stress.
Step 8: Finalize and move toward closing
Once your offer is accepted, you’ll move into the closing process. This stage typically involves scheduling inspections and addressing any issues that may come up, finalizing your mortgage approval, and reviewing the closing costs, which usually range from 2% to 5% of the purchase price. Before closing day, you’ll also complete a final walkthrough to make sure the property is in the agreed-upon condition.
Confidence through preparation
Making an offer on a house can feel overwhelming as a first-time buyer, but preparation makes all the difference. Start with a pre-approval, work with a trusted agent, and know your budget inside and out. In competitive markets, strengthen your offer with earnest money or flexible terms — but never at the cost of your financial security.
With the right approach, your first offer can turn into the keys to your new home.
Disclaimer: Article content is intended for information only. It may not reflect the publisher nor employees’ views. Consult a mortgage professional before making financial decisions. Publishers or platforms may be compensated for access to third party websites.
