Making Offers

An offer is more than just a price. Understanding contingencies, escalation clauses, and what makes an offer strong can be the difference between getting the house and losing it.

Contingencies

Contingencies are conditions that must be met for the sale to proceed. They protect you but can weaken your offer.

Inspection Contingency

Allows you to negotiate repairs or walk away based on inspection findings.

Tip: Never waive this. You can limit to major structural/mechanical issues to strengthen your offer.

Appraisal Contingency

Protects you if the home appraises below the purchase price.

Tip: In competitive markets, you can offer to cover a gap up to a certain amount.

Financing Contingency

Lets you back out if your loan falls through.

Tip: A strong pre-approval letter makes this less risky for sellers.

Sale Contingency

Makes your offer dependent on selling your current home.

Tip: Weakest contingency — sellers often pass. Consider a bridge loan instead.

How to Strengthen Your Offer

  • Get fully underwritten pre-approval (not just pre-qualification)
  • Offer earnest money of 1-3% (shows commitment)
  • Be flexible on closing date (match seller's timeline)
  • Write a clean offer — fewer contingencies = stronger
  • Include an escalation clause with a cap
  • Offer to cover appraisal gap (up to a set amount)
  • Use a reputable local lender (sellers/agents prefer this)
  • Respond quickly — first strong offer often wins

Escalation Clauses

An escalation clause automatically increases your offer by a set amount above competing offers, up to a maximum price.

Example

Offer: $350,000 with escalation of $2,000 above highest offer, up to $375,000.

Not all sellers accept these. Your agent can advise on local norms.

Seller Credits (Concessions)

Seller credits are when the seller pays part of your closing costs. This reduces your cash needed at closing but doesn't change the purchase price.

  • • Conventional loans: up to 3% (with <10% down), 6% (10-25% down), 9% (25%+ down)
  • • FHA loans: up to 6%
  • • VA loans: up to 4%
  • • Useful strategy: offer asking price with seller credits instead of a lower price