What do I need to know about creating an offer to purchase a home?

Before you start submitting offers to purchase a home, here are a some things you may want to consider.

It would be impossible to list all of the scenarios that could come up in writing an offer to purchase a home. Still, before you start submitting offers to purchase a home, here are a some things you may want to consider.

The headings below are listed in the same order as shown on the Residential Sales Contract

Buyers Names

It is important that all parties purchasing the property are listed on the sales contract with their legal names. There may be times an LLC, a trust, or a POA will need to be listed on these documents. You should always advise your agent of the following:

  • Who is purchasing the home
  • Their relationships to each other

Inclusions and Exclusions

The sales contract will automatically include certain improvements, fixtures, etc. These are listed on the contract & by signing both parties agree that these will be left at the home in their present condition. However, you may want to include items not listed, or exclude items listed on the contract. Some examples of this might include:

  • Asking the seller to leave behind the lawnmower 
  • Asking the seller to remove the curtains & floor coverings

Purchase Price

The purchase price is a very important part of the offer. This is the total price you wish to offer forward on the home. This value will impact closing cost amounts, down payment amounts & will be compared to the appraised value if you're obtaining a loan. While the purchase price is highly important, it isn't the only competitive advantage you'll have against other buyers. Everything needs to be taken into consideration when submitted an offer & to some sellers, money isn't the only important factor.

Earnest Money

While earnest money is not required, it is an expectation amongst sellers & creates a level of trust that the buyers will follow through. You can read more about what earnest money is on our site. Typically, it's common to offer 1% of the purchase price as earnest money, sometimes rounded up to the nearest $500 or $1,000 mark. So for example, if your purchase price is $109,000, you might offer $1,100 in earnest money. 

While this is typical, it isn't set in stone. Creating a compelling offer might mean putting down more earnest money, if you can afford to. Remember that if there is no breach of contract, this earnest money will be debited toward the buyer's expenses at closing.

Closing and Closing Costs

This section of the contract spells out when closing occurs, what title company will oversee the closing, the date the buyer will "possess" the property (i.e. move in) & whether the buyer requests that the seller pay a portion of their closing costs. 

Contingencies & Deadlines

The next portion of the contract goes over the possible "protections" or "contingencies" a buyer might opt to have within the contract. Contingencies are provisions for an unforeseen event or circumstance. These might protect the buyer if something unexpected occurs during the process of purchasing the home, taking away some of the potential risks. However, the fewer contingencies there are, the more appealing the offer might be to a seller. Therefore, the option of whether to include or exclude contingencies should be weighed carefully.

Almost all of these contingencies will expire at some point in the closing process, whether that be due to an event occurring or a date passing. Here are some (but not all) of the contingencies that a buyer might have:

  • Loan Commitment
    • If the buyer is obtaining financing from a lender, they may opt for a deadline by which they will have their Loan Commitment. This could protect them in certain conditions if their financing cannot be obtained. 
  • Riders
    • Depending on the requirements of the lender, the circumstances of the buyer, the type of property being purchased, etc. certain riders may be added with additional requirements above and beyond what is written on the sales contract. Typically, the fewer riders are included, the more appealing the offer is to the seller & the more risk is taken on by the buyer.
  • Title & Survey
    • This portion will indicate who is responsible for obtaining a title commitment & title insurance. While it is typically the responsibility of the buyer, it is an possible to require the seller to provide title commitment & insurance.
    • The buyer may also order a survey of the property which they may opt to pay for, or require the seller to purchase & provide to them.
  • Inspections
    • The buyer has the ability to do as many inspections as they so choose & to make any additional requests based on those findings within an allotted time frame indicated in this portion of the contract. The buyer may also choose to forfeit the right to do inspections or agree to not make any additional requests based on their finding (typically referred to as an "As-is" transaction).
    • This section will also give the buyer the option to purchase their own home warranty, or require the seller to purchase one for them on their behalf.
  • Government Inspections & Occupancy Requirements
    • This option may be unnecessary, depending on the local governing authority's requirements. However, if there are occupancy requirements to be met, the buyer will indicate here how long the seller has to meet said requirements & provide the buyer with the necessary documentation. 

Special Agreements

This section might indicate any type of special circumstances or agreements within the two parties that has not previously been spelled out in the contract. 


Once you understand the different options you might be afforded, the potential risks you may be taking on & the responsibilities you have within your contract, you can confidently submit an offer to the seller. The seller will have an allotted amount of time to respond to your offer. This is called the acceptance deadline. The seller can either accept the contract as it stands by signing the original offer, reject the offer entirely, or counter with new terms by "rejecting" the offer and returning a counter offer.