Real Estate Agent and Trainer, Robert Rico, explains how to write a strong real estate purchase offer on a property. Do you want to see more video blogs? Subscribe here!


This week, we are dealing with one of the fundamental basics of being a real estate agent, and especially a buyers’ agent. That is: writing an offer!

When you are working with buyers, one of the most important things you can do is write the real estate purchase offer. The success of getting the home these buyers want is dependent on your offer being accepted – which means it should be well put together!

Real Estate Purchase Offer

There are three main key components to an offer.

  • Give A Good E.M.D. (Earnest Money Deposit)

One of the main basics of an offer is the EMD: Earnest Money Deposit. This is the amount of cash that the buyers are putting down to secure their position in the offer. They would give their deposit to a third-party escrow company, a concept we’ve covered in our escrow blog. A higher EMD indicates that the buyers are more interested in the house, because they are willing to lose more (they have more “on the line”). 3% is considered a very good earnest money deposit, 2% is just okay, but any less may imply that the buyer does not seem serious about purchasing the property. That’s always a worrisome sign for the sellers because they are taking their house off the market for a buyer – they want to make sure the deal will go through.

  • Think About The Offer Price

The second component is a very important piece too — the dollar amount of the offer. But of course!! Let’s say the house is priced at one million dollars. What’s an appropriate offer? Well, it definitely depends on the market, the house, and the sellers. Your job as the Real Estate Agent is supposed to help your buyers put together the best offer with the best chance of getting accepted.

To determine the best offer to go with, we recommend knowing D.O.M.: Days On Market. This is the measure of how many days a house has been listed on the MLS for sale – and a longer time on the market usually means the sellers will be more motivated. It’s a simple supply/demand scenario – the sellers are “demanding” a payment, and you are “supplying” that payment offer. So, if the house has been on the market for a long time, chances are higher that the sellers will accept an offer below their asking price.

However, you do want to be careful of something – if the house has been on the market for a while, is it just overpriced or is there some other flaw with it that you’re not seeing? It’s a good idea to call other agents in the are who may have already been through the house with their clients and see if they have any feedback. Communication between agents is always helpful since the client gets your expertise PLUS the expertise of your colleagues.

In today’s sellers’ market, though, sometimes the DOM will be low and there is already interest in the house from other buyers. In that case, we suggest to offer the list price if you really want the house – it greatly boosts your chances of your offer being accepted.

  • Consider The Contingencies

Another way to improve your chances of being accepted is to have few (or no) contingencies, and only on the reasonable items. What is a contingency? It’s saying, I’ll buy your property, if and only if this contingency is met — a sort of “if this, then that” caveat in the offer contract. For example, one clause that many buyers would love to put in is a “sale contingency” — that is, saying that they will only buy the new house IF their old house sells. However, this makes for a terrible offer. The sellers are already trying to sell their house; they don’t want or need the stress of waiting on someone else’s sale too!

You have to be careful when drafting contingencies. You want to protect your buyers’ interests, but you also want to present attractive offers that will get accepted. That’s why it’s best to stick to standard, reasonable contingencies such as a loan contingency (“I will only buy this property if I can get a loan on it”) or appraisal contingency (“I will only buy this property if the appraiser says it’s worth what I’m offering”). With these restrictions, most sellers will move forward with escrow, since they are comfortable with these “if only” statements.

Signing Real Estate Purchase Offer

We write these blogs with the intention to be a source of education and information – if you’re just interested in the field, studying to become an agent, or even an agent yourself!

Come back next week for our next installment and (of course…) don’t forget to subscribe to our YouTube Channel!!


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