When you have found the home that combines the best of your dreams with the realities of your financial situation, it’s time to make an offer.

While you don’t have to offer the seller’s asking price, if you put in a lower bid for the home and someone else makes a higher offer, you could lose it. The Mills Team can give you information to help you come to your decision, but ultimately the decision is yours.

You’ll need to consider several factors:

  • The basis of your offer should be the market value of the home. To determine the fair market value of the home, The Mills Team will look at sales of comparable homes in the area. Knowing what those homes sold for will give you some idea of what the market value is. Sometimes, however, it may be difficult to find comparable sales (in a new development or in an area that’s being revitalized, for example).  In that case, the market analysis parameters may need to be opened up in order to provide more data about recent sales in the area and make an appropriate offer.  You can also rest assured that the purchase will be contingent upon an independent appraisal confirming the market value of the home.
  • Other factors might influence your decision of when and how much to offer: What other home choices do you have? How quickly do you need to make a move? What is the financial impact if you can’t find a home soon? If these factors are weighing heavily in your decision, you may want to offer the list price (or more earnest money, but more about that in a moment) in order to speed up the process.

You should consider offering the full price of the home if:

  • You think the house is accurately priced or under-priced.
  • The house is just what you have been looking for, and there are few other houses on the market that meet your needs.
  • The house has just come on the market and similar houses have recently sold very quickly.

The Mills Team is here to put our experience to work for you. We will help you consider every known factor in order to make the offer that is most likely to help you get the home you want at a price you’re happy with.

Earnest Money

When you submit an offer, you must include a cash deposit, called earnest money. This deposit indicates to the seller that you are serious in your intent to purchase the home.

There is no specific required amount, but general practice in our area is 1% of the purchase price. If you really want the home and have reason to believe that the seller may receive other offers, a higher offer of earnest money might sway the seller in your direction. The Mills Team will work with you to determine a fair amount.

Earnest money is generally given to the listing broker who places it in an escrow account where it is held until the closing (or until mutual release). At closing, the deposit becomes part of your down payment.

If the transaction never makes it to closing, the earnest money is either returned to the buyer or given to the seller. You will generally get the deposit back if:

  • The seller fails to live up to the terms of the sales contract
  • An inspection reveals major defects in the home
  • You cannot obtain financing
  • If any specific conditions in the sales contract cannot be fulfilled

If you fail to live up to the terms of the sales contract, the seller can keep the earnest money.

The Sales Contract

An offer to purchase spells out all of the details of the transaction. If, for example, you want to be sure that the washer and dryer are included in the sales price of the home, that intention must be specified in your original offer. A verbal agreement is not enough.

An offer to purchase typically includes:

  • The buyer’s name and statement of intent to purchase the property
  • The address of the property
  • The purchase price and how it is to be paid (e.g., amount of earnest money, where it will be deposited, amount of down payment, amount of mortgage, terms of the loan, etc.)
  • A provision for the closing of the transaction and the transfer of possession of the property to the buyer by a specific date
  • A provision for title evidence
  • A provision for the completion of the contract should the property be damaged or destroyed between the time of signing and the closing date
  • A statement of remedies available in the event of default
  • Dated signatures of all parties
  • An expiration date and time (at which point the offer will no longer be valid if the seller has not responded with either an acceptance or a counteroffer)
  • All contingencies (e.g., no major defects uncovered by an inspection or title problems discovered in the title search)

It may also include:

  • Personal property included in the transaction (e.g., refrigerator, dining room chandelier, storage units in the garage, etc.)
  • Any real property to be removed by the seller before closing (e.g., a storage shed)
  • The transfer of any applicable warranties
  • The identification of any leased equipment that must be transferred to the purchaser or returned to the lessor (e.g., a water softener or security system)
  • Closing or settlement instructions
  • The transfer or payment of any outstanding taxes or special assessments
  • The buyer’s right to inspect the property shortly before closing

Any offer may be revoked at any time before it has been accepted. Once the buyer and seller have agreed, signed the purchase agreement and all counteroffers, if any, then the offer to purchase becomes a valid sales contract.


Just as you don’t have to offer the list price for the home, neither does the seller have to accept your offer. Most home sales involve a process of offers and counteroffers until both parties are satisfied with the price.

A counteroffer is a continuation of the purchase agreement. Everything in the purchase agreement stands except for those items specifically addressed in the counteroffer. The buyer may then accept or reject the counteroffer. He/she can continue the process with another counteroffer.

During this process, The Mills Team will serve as a go-between. We are skilled negotiators, and we understand how to keep your negotiating position strong throughout the entire process.  We work hard to get you the best price possible, along with protecting your interests.

Like the original sales contract, all counteroffers should be submitted in writing with a specified expiration date and time. They may be revoked at any time prior to the other party’s acceptance and become valid contracts when they have been signed by both parties.


Contingencies are additional conditions that must be satisfied before the contract is fully enforceable. They include:

  • The actions necessary to satisfy the contingency
  • The time frame within which the actions must be performed
  • Who is responsible for paying any costs involved

The most common contingencies are:

  • Mortgage contingency-protects the buyer’s earnest money until financing can be arranged
  • Inspection contingency-the buyer may request inspections for termites, lead-based paint, structural and mechanical systems, sewage systems, and radon or other toxic materials
  • Survey contingency-a survey confirms lot boundaries and reveals any zoning or code violations associated with the property (e.g, is the property in a flood plain-which will require additional insurance?)
  • Property sale contingency-the buyer may make the sales contract contingent on the sale of his/her current home to ensure the availability of cash for the purchase. Likewise, the seller may accept the offer contingent on their purchase of another home.

Sometimes a seller will accept an offer with contingencies but will include an escape clause. This clause permits the seller to continue to market the property until all of the buyer’s contingencies have been removed. In this case, the buyer should retain the right to eliminate the contingencies if the seller receives a more favorable offer.

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