An active adult couple touring a home with a real estate agent

Buying a house can be a deeply personal process. Here's how to make an offer on your future home.

The homebuying process is truly a unique mix of emotions, legal obligations, and deal-making that's unlike many other business or real estate transactions. Commercial real estate transactions are about business metrics, profit, and usability, whereas buying a home is inherently more subjective. Homebuyers aren’t simply looking to tick-off a list of requirements but rather to find a place that gives them a sense of security and well-being.

Finding a home you love can be easy for some people, but the process of signing on the dotted line requires a careful, methodical approach. We’ve decided to demystify the process and help you better understand how to make an offer on a house.

Begin Your Home Search

An active adult couple using a tablet to shop online for a home in a 55+ community

Now is the time to really drill down on what you’re looking for in a new home. 

Naturally, the process of making an offer on a house starts with finding the house that’s right for you. Now is the time to really drill down on what you’re looking for in a new home. Many prospective homebuyers of a certain age are looking to right-size their home which requires special considerations.

You’re making a significant decision, so be sure to discuss with your partner what you want out of a home in the long-term. Don’t make compromises you might later reconsider when it comes to the convenience of the location, neighborhood amenities, and budgetary concerns like a change in tax rate.

Moving to a new region of the country can be intimidating and having a local expert on your side is critical not only to your home search but to every other phase of the process. This brings us to our next point.

Find an Agent You Trust

A senior couple meeting with a real estate agent to find a home in an active adult community

Having a local expert on your side is critical not only to your home search but to every other phase of the process.

Though it's undoubtedly part of their job, an experienced agent is so much more than simply a salesperson. An agent who has distinguished themself in their territory will be your guide to the area you’d like to move to. Their expertise will save you hours of research when it comes to questions of taxes, local services, and the lifestyle of the area you're hoping to live in.

As we move further into the process of making an offer, your agent becomes your avocate and will help you get the most house for your money.

Determining Your Budget

An active adult couple making their budget on a laptop in their living room

Getting a realistic estimate of what you can expect your current home to sell for is a great starting point.

Before you get to making an offer, take an honest look at what you can afford not just today but in the future. Getting a realistic estimate of what you can expect your current home to sell for is a great starting point. Next, consider enlisting the services of a financial advisor, if you’re not already working with one for your retirement planning. They’ll be able to help you understand how your income might change over time so you can be prepared for any changes in income down the road.

Another key part of budgeting is looking at the total cost of ownership of the homes you’re considering. A good agent will know what you can expect to pay in HOA fees and how those may or may not change over time. They’ll also help you understand how your property taxes and homeowners’ insurance will differ from what you’re currently paying.

Get Pre-Approved for Financing

A realtor and a mortgage broker working to pre-approve a home loan

Many banks and lenders now offer pre-approvals online, eliminating the need for a trip to the bank.

This one is rather obvious but, let’s be honest, searching for a new home is a fun, aspirational activity, and it's easy to get ahead of ourselves with that excitement in the mix. If you’ll be needing any financing, it's best to settle this early to avoid any possible disappointments. Many banks and lenders now offer pre-approvals online, eliminating the need for a trip to the bank.

Timing Is Everything

A realtor handing house keys to a new active adult homeowner

Even a few days hesitation can be the difference between a successful offer and one that’s too late.

It's best to move carefully yet decisively when deciding to make an offer. Even a few days hesitation can be the difference between a successful offer and one that’s too late. If you’re still feeling unsure, give your real estate agent a call. Using their expertise in their market, they’ll know when the timing is right.

Consider Contingencies

A senior woman preparing a home offer with a few contingencies

An offer with few contingencies may be more attractive to a seller, but contingencies also serve as protection to the buyer.

Contingencies are conditions placed on an offer. The most common involve the outcomes of home inspections. Other routine contingencies involve securing financing, whether or not your previous home sells, and conditions based on home appraisal.

An offer with few contingencies may be more attractive to a seller as, in effect, contingencies are conditions that must be met before the sale is executed. Having fewer contingencies in an offer will likely increase the chances your offer will be accepted. However, contingencies also serve as protection to the buyer. Once again, your real estate agent can offer valuable insights when contemplating these tradeoffs. 

Draft Your Offer

A wooden cutout of a house with a smiling active adult couple blurred in the background

Your offer is a legally binding document, and now is the time to rely on your real estate agent to craft the best offer. 

You’ve found the house, you have your financing pre-approved, and you have all the other pieces in place. It’s showtime! Your offer is a legally binding document, and now is the time to rely on your real estate agent to craft the best offer. Their legal knowledge will help you avoid potentially costly mistakes when it comes to drafting this document.

Your agent may suggest putting what's called earnest money into escrow. Think of this sum, typically one to three percent of the offer, like a deposit that demonstrates your good faith in the deal. Should the offer fall through, don’t worry: This money is then returned to you. More earnest money definitely sweetens a deal for a seller, but be sure not to put up more money than you’re comfortable being without during this process.

What’s Next?

A smiling family holding up a small wooden house on a a sunny day

Having an agent representing your interests will make a significant impact on the chances of your offer being accepted.

There are several ways a seller can respond to your offer. Perhaps the simplest is that they accept it and you move on to closing. On the opposite end of the spectrum, they may decline the offer outright which means it's back to looking at listings and moving on to plan B. 

The third outcome is the seller makes a counteroffer. As previously mentioned, this is when you'll really see the value of having a real estate agent who knows the local market. If you’ve lowballed your first offer, this counteroffer may be in line with what you expected to pay in the first place. Your agent will be able to assess the fairness of this offer and advise you whether to accept, propose another counteroffer, or to walk away.

While this is a good general outline of the key steps to making an offer on a home, every market is just a little bit different. Therefore, having an agent representing your interests will make a significant impact on the chances of your offer being accepted.