The Initial Offer
Can the buyer and seller agree on the price and terms?
The three major potential negotiations · Part 1
What Happens When a Buyer Makes an Offer?
An offer is more than a price. Learn how financing, protections, concessions, timing and other terms shape the agreement for both buyers and sellers.
Start with the three negotiations ↓The transaction framework
One transaction. Three potential negotiations.
An accepted offer may establish the transaction without ending every negotiation. The contract determines which later rights and opportunities exist.
The Home Inspection
What happens after the buyer learns more about the home’s condition?
The Appraisal
What happens if the appraised value is below the contract price?
Explore the offer
Choose the question you want answered.
Select a topic below. Only one answer appears at a time, while the complete guide remains available to search engines and assistive technology.
Offer topic 01
What Is Included in an Offer?
An offer is a proposed contract—not simply a price. It tells the seller what the buyer is willing to pay and the conditions under which the buyer is willing to purchase.
If you’re buying
- Purchase price and financing
- Earnest money deposit
- Requested seller concessions
- Inspection and appraisal protections
- Settlement date and possession
- Property and items to be included
If you’re selling
- Review how the terms work together.
- Consider both the financial result and the likelihood of closing.
Offer topic 02
Purchase Price vs. Offer Strength
The highest price is not automatically the strongest offer. An offer with fewer risks, stronger financing or a better timeline may be more attractive to a seller.
If you’re buying
- Know the highest price and total payment you can comfortably accept.
- Avoid removing protections without understanding the risk.
If you’re selling
- Compare the likely net proceeds—not only the headline price.
- Consider financing, contingencies, concessions and the buyer’s ability to perform.
Offer topic 03
Earnest Money Deposit
The earnest money deposit shows the buyer’s good-faith intent to complete the purchase. It is generally held by the agreed escrow agent and later credited according to the contract.
If you’re buying
- Deliver the deposit by the contract deadline.
- Understand when the deposit may be returned or placed at risk.
If you’re selling
- Consider the deposit amount in relation to the offer and transaction risk.
- Remember that receiving the deposit is not the same as having the right to keep it.
Offer topic 04
Financing and Pre-Approval
Financing affects whether the buyer can complete the purchase and which property conditions, costs or timelines may matter to the lender.
If you’re buying
- Submit a current, accurate pre-approval with the offer.
- Confirm the estimated payment and cash needed for the specific property.
If you’re selling
- Review the loan type, down payment and supporting documentation.
- Consider financing alongside the other terms rather than treating a loan type as an automatic weakness.
Offer topic 05
Seller Concessions
A buyer may ask the seller to contribute toward allowable closing costs. The request affects the seller’s net proceeds and may be limited by the buyer’s loan program.
If you’re buying
- Request only what your financing and expected closing costs can use.
- Compare the value of a concession with changing the offer price.
If you’re selling
- Calculate the net effect of the concession.
- Evaluate whether the price reasonably supports the requested contribution.
Offer topic 06
Inspection, Appraisal and Other Contingencies
Contingencies give a party specific rights when stated events occur. They may protect the buyer, but they can also affect how a seller evaluates the offer.
If you’re buying
- Understand exactly what each contingency allows and its deadline.
- Do not waive a protection merely to make an offer look stronger.
If you’re selling
- Compare the scope and timing of each contingency.
- Consider how much uncertainty remains after accepting the offer.
The signed contract controls. Not every transaction includes inspection, appraisal, financing or home-sale protections.
Offer topic 07
Settlement Date and Possession
The settlement date determines when the transaction is scheduled to close. Possession determines when the buyer may occupy the property.
If you’re buying
- Coordinate the date with your lender, lease and moving plans.
- Do not assume you can move in before settlement or immediately afterward unless the agreement permits it.
If you’re selling
- Consider the time needed to move and complete agreed work.
- Evaluate requests for early occupancy or post-settlement possession carefully.
Offer topic 08
What Makes an Offer Competitive?
A competitive offer responds to the property, market and seller’s priorities without taking risks the buyer does not understand or cannot afford.
If you’re buying
- Use relevant comparable sales and current competition.
- Submit complete documentation and realistic deadlines.
- Keep the offer clean, clear and financially workable.
If you’re selling
- A competitive offer is one that provides an acceptable result with a credible path to closing.
Offer topic 09
What Should Sellers Compare?
Sellers should compare every material term and the practical effect of the offer—not select a buyer using price alone.
If you’re buying
- Recognize that the seller may be comparing certainty, timing and convenience as well as price.
If you’re selling
- Price and estimated net proceeds
- Financing and pre-approval
- Concessions and contingencies
- Deposit and deadlines
- Settlement and possession
- Probability of closing
Offer topic 10
Accepting, Rejecting or Countering
A seller may accept an offer, reject it, allow it to expire or propose different terms. A counteroffer is a new proposal and may require additional negotiation before an agreement exists.
If you’re buying
- Decide whether the counter still works for your budget and goals.
- Keep deadlines and competing-offer conditions in perspective.
If you’re selling
- Counter only the terms that need to change.
- Understand that a buyer may accept, reject or counter your proposal.
The property is not under contract until the parties have signed the same agreement and it has been delivered as required.
Offer topic 11
How Does the Realtor Help?
The Realtor helps turn the parties’ goals into a clear, informed and properly managed negotiation. The buyer and seller still make the final decisions.
If you’re buying
- Explains the contract and available protections.
- Analyzes comparable sales and develops an offer strategy.
- Prepares, presents and negotiates the offer.
If you’re selling
- Compares the complete financial effect and significant risks.
- Explains the available responses.
- Negotiates according to the seller’s instructions.
Offer topic 12
Frequently Asked Questions
Common offer questions do not always have one universal answer because the signed contract, financing and circumstances matter.
Is the highest offer always best?
No. The seller may consider net proceeds, financing, contingencies, timing and likelihood of closing.
Can a buyer change an offer before acceptance?
Generally, an offer may be withdrawn or revised before acceptance, subject to applicable contract and delivery rules.
Does a pre-approval guarantee the loan?
No. Final approval depends on the buyer, property, appraisal, title and lender requirements.
Can the seller negotiate more than price?
Yes. A counteroffer may address any negotiable term, including concessions, contingencies, dates and included property.
When is the home officially under contract?
When the parties have signed the same agreement and it has been delivered as required by the contract.
Continue through the transaction
The next two negotiations
The inspection and appraisal guides use this same interactive format and explain the options available to buyers and sellers.
What Happens During a Home Inspection? →
What Happens When a Home Appraises Low? →
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