Making Offers: A Step-by-Step Process for Real Estate Investors

You’ve selecting your real estate agent.

With the recommendations of your real estate agent, you’ve built your real estate investing dream team.

You’ve taken some time to come up with your first pass on establishing your buying criteria for the deals you’re interested in.

Using that criteria you’ve had your real estate agent set you up with automated emails to notify you when properties that match your MLS searchable criteria are listed for sale.

As you receive properties you manually analyze them for your criteria that is not MLS searchable.

For the ones that still look promising you ask your real estate agent to schedule showings and you go look at them.

Now, you’ve found a property that meets your criteria, and you want to buy it.

Let’s go over making offers to buy the property.

Call Seller’s Agent Before Writing Offer

Your agent should always call the seller’s agent before you write your offer.

This call is an opportunity to gather essential information that can help you structure a stronger, more appealing offer.

Often, this call happens while you’re out looking at the property.

Your agent will try to learn what the seller wants, which can include things like the ideal closing date or flexibility on their move-out date. The seller might need time to find a replacement property, or they could be interested in post-closing occupancy, where they stay in the home for a period after closing.

Knowing these preferences helps you align your offer with the seller’s needs, making it more likely to be accepted.

Your agent should also ask if there are any other offers or how active the property has been with showings. This gives you an idea of the competition and whether you might need to make a more aggressive offer.

It’s also a good time for your agent to begin establishing confidence in your ability as a buyer to close the deal, showing that you’re well-qualified and financially prepared to move forward. This can be especially important in a competitive market.

Finally, your agent should ask about any special circumstances or preferences that could influence the seller’s decision. The more you know about the seller’s situation, the more tailored and effective your offer will be.

Understanding Market Conditions

Understanding market conditions is key when making an offer on a property.

One of the first things to assess is whether you’re in a buyer’s or seller’s market. A buyer’s market means there are more homes available than buyers, giving you more negotiating power. A seller’s market is the opposite—more buyers than homes—often leading to higher prices and quicker sales.

The absorption rate measures how quickly homes are selling in a specific area. It’s calculated by dividing the number of homes sold in a month by the number of homes available. A high absorption rate indicates a hot market, while a low rate suggests slower sales.

Your real estate agent can provide this and other key market data to help you gauge the environment.

Real estate markets can vary dramatically by neighborhood. By understanding these specifics, you can tailor your offer to match the current conditions and improve your chances of success.

What Your Agent Needs to Write an Offer For You

Your agent needs certain information from you to write a strong and accurate offer. There are other choices to be made when writing a contract, but these tend to be the big ones.

Getting these details ready upfront will help streamline the process and avoid any delays.

Full Contact Information – Provide your name, phone number, email, and mailing address.
Purchase Price – Decide on the price you’re offering based on market conditions, comparable sales, and your financial goals.
Seller Concessions – Let your agent know if you want the seller to cover closing costs.
Financing Details – Include your down payment amount and the type of loan you’re using to finance your rental properties.
Closing Date – Pick a closing date that aligns with both your needs and the seller’s timeline.
Contingencies – Specify which contingencies you want to keep and which you’re okay waiving, especially in competitive markets.
Due Diligence Documents – Request any due diligence documents, such as leases, information on solar panels or security systems if applicable, receipts on recent work completed if important, that you want included in the offer.
Post-Closing Occupancy Agreement – If the seller needs to stay after closing, provide details for how long and under what terms.
Conditional Sale Requirements – Let your agent know if you need to sell another property before you can buy this one.

This is what your agent will need to be able to write your offer.

Determining Your Offer Price

When making an offer, you’ll need to determine both your initial offer price and your maximum purchase price for negotiations. Your offer should be based on a thorough analysis using The World’s Greatest Real Estate Deal Analysis Spreadsheet™, which considers factors specific to your real estate investment strategy.

For fix-and-flip or BRRRR strategies, it’s crucial to consider both the current as-is value and the After Repair Value (ARV). These figures help you calculate how much you can offer while still ensuring a profitable exit. We’ll cover how to determine property values using comparable sales in an upcoming chapter.

Sold Price Does Not Equal Offer Price

If you’re looking at what other properties have sold for, it is important to realize that the sold price is not necessarily the offer price.

Often, a buyer will offer a higher price and, after the inspection, appraisal and any other negotiations, the sold price may be higher or lower than the original offer price.

It is lower when the buyer negotiates a price reduction and plans to address issues that came up during negotiations after closing.

It is sometimes higher when the buyer negotiates to have the seller resolve issues with the property prior to closing like putting on a new roof as an example.

Earnest Money

Earnest money is a deposit you make to show the seller that you’re serious about buying their property. It’s important because it demonstrates your commitment to following through with the purchase, and in return, the seller takes the property off the market while your contract is processed.

The amount of earnest money you offer can vary, but it’s often around 1% of the purchase price, rounded to the nearest $1,000. The suggested earnest money amount is frequently listed on the MLS sheet, and while it’s negotiable, offering the suggested amount can strengthen your offer and show the seller you’re committed.

Earnest money can impact the seller’s perception of your offer. A larger deposit may signal that you have more “skin in the game” and are less likely to back out. However, if you maintain your contingencies, such as for inspection, financing, or appraisal, you can still terminate the contract for legitimate reasons and typically recover your earnest money. There’s not usually a “changed my mind” or “found a better property” contingency in most contracts, so terminating without a valid reason may cause you to lose your deposit.

The amount of earnest money becomes more of a factor in situations where both you and other buyers have waived contingencies. In these cases, earnest money can act as a tie-breaker, but if you still have all your contingencies in place, the earnest money is less significant. Most sellers and agents understand that earnest money is refundable under valid contingencies, so it’s often not a major factor beyond offering a reasonable amount.

That said, some sellers and agents may get hung up on the amount of earnest money, even though it’s not typically a significant issue unless contingencies are waived. We’ll discuss earnest money in more detail in an upcoming chapter.

What Happens If You Don’t Perform

Before you write an offer, it’s important to discuss with your real estate agent what happens if you don’t perform. You need to fully understand your risk. Are you risking your earnest money? Could the seller sue and force you to buy the property under specific performance? Make sure you’re clear on the consequences.

When a seller accepts your offer, they start taking steps toward selling the property to you. They might start packing or hire movers. Some sellers rent a new place or even begin purchasing another property. These actions often involve significant costs, and they’re counting on you to follow through with the purchase.

If you don’t perform, you could cost the seller money. This could include their moving costs, new rental expenses, and even the earnest money they’ve put down on a new property. They may also have paid for inspections and appraisals, expecting the deal to close.

Ideally, you’ve had this conversation before even looking at properties. It’s also smart to have consulted an attorney or CPA if you have legal or tax questions. But, it’s always good to review your risks again before making an offer. Refresh your memory about what could happen if things don’t go as planned.

The way your contract is written determines whether it’s an Earnest Money Contract or a Specific Performance Contract. In an Earnest Money Contract, the seller usually keeps your deposit if you fail to close. In a Specific Performance Contract, the seller could sue and force you to complete the purchase. Make sure you know which one you’re signing.

You should also be aware of your out-of-pocket expenses. If you don’t perform, you likely won’t get back costs for things like inspections and appraisals. These expenses add up and can be lost if the deal doesn’t go through.

Always review and understand your risks. This will help you make informed decisions and avoid costly mistakes.

Contingencies in Your Offer

When including contingencies in your offer, it’s important to understand how they affect your chances of securing the property. Contingencies protect you but can also make your offer less attractive in competitive markets.

Common contingencies typically protect your ability to back out of the deal for critical reasons.

Financing Contingency – Protects you if you can’t secure a loan.
Inspection Contingency – Allows you to back out or negotiate based on the inspection results.
Appraisal Contingency – Ensures the property appraises for at least the purchase price.

There are also less common contingencies, which may be relevant depending on the property or your unique situation.

Title Contingency – Ensures you’re satisfied with the title search results.
Home Sale Contingency – Ties your purchase to the successful sale of another property.
Insurance Contingency – Gives you the option to terminate if insurability is an issue after talking to your insurance agent.
Survey Contingency – Allows for a boundary survey to confirm property lines.
HOA Document Contingency – Ensures you review the Homeowner’s Association documents.

Knowing when to include or waive contingencies can make a big difference in a seller’s market. In strong markets or multiple-offer situations, waiving or limiting contingencies can make your offer more attractive to the seller. Just be cautious—removing these protections could expose you to more risk.

Contingencies also affect the competitiveness of your offer. The more contingencies you include, the more opportunities you have to back out, which may signal hesitation to the seller. Fewer contingencies can give the seller confidence that the deal will close smoothly.

Remember, there’s no “I changed my mind” or “I found a better property” contingency. Terminating a contract for reasons that don’t align with the contingencies you’ve included could result in losing your earnest money. Always act in good faith and stick to the terms of your contract.

Financing and Pre-Approvals

Having strong financing and a pre-approval from your mortgage broker in place is critical to submitting a competitive offer. A pre-qualification is an estimate based on basic financial information, whereas a pre-approval involves a more thorough review by the lender and carries much more weight. Sellers prefer pre-approvals because they show you’ve already cleared key financing hurdles, making your offer stronger and more reliable. Always include a strong lender letter with your offer to reassure the seller that your financing is solid.

While the seller gets their cash at closing regardless of your loan type, they care about the type of loan you’re using because some loans come with stricter requirements.

FHA and VA loans, for example, often have more stringent appraisal and inspection standards, which can complicate or delay the process. These loans also tend to take slightly longer to close compared to conventional loans, which can cause hesitation for sellers who are looking for a quick and seamless transaction.

Conventional loans, on the other hand, are seen as more straightforward, with fewer restrictions and a quicker path to closing. Because of these differences, sellers often lean toward offers with conventional financing.

Cash Offers versus Financing Offers

When making an offer on a property, sellers might have a slight preference for cash offers because they are seen as simpler and less risky. With no financing involved, cash offers can close quickly and eliminate the risk of a deal falling through due to loan issues. Cash offers also show that you have the funds readily available, making the process more straightforward for the seller.

However, financed offers can still be highly competitive if you structure them well. Even though they involve a loan, offering the right terms—such as a strong down payment (or additional resources to make up an appraisal shortfalls), a short closing period, or fewer contingencies—can make a financed offer just as attractive to the seller. It’s all about presenting the offer in a way that gives the seller confidence.

For cash offers, you’ll need to provide Proof of Funds. This document shows that you have the money available to complete the purchase, which reassures the seller that you’re a solid buyer and ready to close.

For financing offers, you’ll need to include a lender letter with your offer. This letter is mandatory for all loans to show the seller that you’re pre-approved and that your financing is in place. Without it, a financed offer will appear weak and uncertain.

The type of loan you’re using also matters. Conventional loans are generally easier for sellers to accept, while VA and FHA loans can be slightly harder to get accepted. This is because these loans sometimes have stricter appraisal or inspection requirements, which can make the process more slightly more complicated for the seller.

One additional way to strengthen a financed offer is by having your lender call the seller’s agent. In a lender call, the lender speaks directly to the seller’s agent to confirm the strength of your financing and your ability to close the deal. If your lender isn’t calling automatically, a great buyer’s agent will prep them to do so proactively. Great seller’s agents are often calling the lender themselves to verify the buyer’s qualifications and protect their sellers.

In short, both cash and financed offers have their advantages, but how you present your offer can make all the difference. With the right preparation and communication, a financed offer can often be just as compelling as a cash offer.

Down Payment Amount

The size of your down payment can play a significant role in how your offer is perceived.

A larger down payment often strengthens your offer because sellers perceive that you’re more financially stable and less likely to face issues securing financing. This may or not be true, but sellers tend to perceive it this way. From a practical standpoint sellers typically see larger down payments as a sign that you’re better positioned to make up any potential appraisal shortfalls if they arise.

From the seller’s perspective, a lower down payment may seem riskier, as it could signal potential financing challenges. This is something to be aware of, especially as a Nomad™ or house hacker, where you’re typically putting down smaller amounts. However, this doesn’t mean you’re a weak buyer—you’re just thinking long-term as an investor.

For Nomads™ and house hackers, smaller down payments are often part of a strategic approach. You’re conserving capital to buy additional properties. It’s crucial that your agent helps explain this strategy to the seller’s agent. By explaining that you’re not putting down less because of financial weakness, but because you’re planning for future investments, you can help ease any concerns the seller might have.

Additionally, some appraisers may scrutinize the deal more closely when they see a smaller down payment, as they are focused on protecting the lender.

In general, when putting smaller amounts down, it’s even more important to do everything else possible to strengthen your offer.

Dealing with Multiple Offers

When facing a multiple-offer situation, you’ll need to take extra steps to make your offer stand out.

One effective strategy is to remove or limit contingencies.

While this adds some risk on your end, it shows the seller that you’re serious and less likely to back out of the deal. Reducing contingencies like inspection or appraisal can strengthen your offer in a bidding war.

Being flexible with terms and conditions is also important. If the seller needs more time to move, offering a flexible closing date or allowing post-closing occupancy—maybe even without an extra fee because you already included it in the price you offered—can make your offer more appealing. Flexibility demonstrates that you’re willing to accommodate the seller’s needs, which may give you an edge over competing offers.

That said, it’s essential to know when to walk away. In a highly competitive market, it can be tempting to overbid or take on too much risk just to win the property. But if the numbers don’t work for you or if the situation feels too risky, it’s okay to walk away and wait for a better opportunity. Staying disciplined and sticking to your criteria will benefit you in the long run.

Above Asking Price Offers

In most normal markets, you won’t need to make an above asking price offer. However, in hot markets, you might.

Offering above the asking price can be a smart strategy in a highly competitive market or on a highly desirable property. It makes sense when you know there are multiple offers or suspect there may be. If demand is high and you want to improve your chances of getting the deal, going above asking can set you apart from other buyers.

How much above the asking price you should go depends on the market, the property’s value, and how well the deal still works at a higher price for you. You don’t want to overpay, but offering a bit more can sometimes be the difference in securing the property.

There are both risks and benefits to making an above-asking offer. The benefit is that you increase your chances of getting the property, especially in a seller’s market. However, the risk is that you might overpay, and the property may not appraise for what you’ve offered.

If the property doesn’t appraise at your offer price, the lender will only loan based on the appraised value. Often, when making above asking price offers, you may waive your ability to object to the property not appraising for the full amount. In some cases, you’ll require that it appraise for at least the original list price, but this is also a negotiated point.

If the property doesn’t appraise, you’ll need to cover the difference between the appraised value and the purchase price out of pocket. This can increase your down payment significantly. For example, if you offered $350,000 but the appraisal comes back at $330,000, your lender will only loan based on the $330,000. You’ll need to cover the additional $20,000 on top of your planned down payment.

Realize that putting more than your down payment into the deal often impacts your returns on the investment. Be sure to analyze this using The World’s Greatest Real Estate Deal Analysis Spreadsheet™.

Before making an above-asking offer, make sure you’re comfortable with the risks and have the financial resources to handle any potential appraisal shortages. Always balance the desire to win the deal with sticking to your established deal criteria.

Lowball Offers

Making a lowball offer—one that’s significantly below the asking price—can be a delicate situation, but it can be done tactfully to avoid alienating the seller, seller’s agent and maintaining the reputation of your agent.

The key is to approach it respectfully and provide solid reasoning behind your offer. Rather than framing it as an aggressive move, present your offer as a well-considered decision based on the property’s condition, market data, or other factors.

It often makes sense to offer less than the asking price when a property has been sitting on the market for a while, especially if it has already had price drops or seems due for one. Properties that are significantly overpriced—as determined by comparable sales or other market factors—are also candidates for a lower offer. In these situations, the seller may be more open to negotiation because the market has already signaled the property isn’t priced correctly.

When offering below asking price, it’s important to justify your offer to the seller or their agent. Use comparable sales data to show that similar properties have sold for less, or point out any needed repairs or updates that affect the property’s value. Highlight any market conditions—like slowing demand or rising inventory—that support your offer. By providing this context, you make your offer seem reasonable and thoughtful, rather than simply trying to lowball for the sake of getting a bargain.

Approaching a lowball offer with respect, clear reasoning, and market data can help you secure a property with a lowball offer.

Escalation Clauses

An escalation clause is a tool you can include in your offer that allows your bid to automatically increase if competing offers come in higher. It works by stating a base offer amount and then specifying the amount by which you’re willing to raise your offer if needed, up to a maximum price. For example, if your offer starts at $300,000 with a $5,000 escalation, your bid would increase by $5,000 increments above competing offers, up to a set limit.

There are pros and cons to using escalation clauses. On the plus side, they can help you stay competitive without overcommitting right away. Instead of offering your maximum price up front, you let the escalation clause adjust your offer only if necessary. However, escalation clauses can also reveal how much you’re willing to pay, which may weaken your negotiating position. Additionally, not all sellers or their agents like escalation clauses, as they can complicate the offer process.

Escalation clauses are most useful when you expect multiple offers and want to avoid overpaying from the start. Instead of jumping to your highest offer immediately, the clause allows your offer to rise only if needed. However, they are not always the best option, especially if you’re already presenting a strong offer. In some cases, simply putting forward your best offer upfront can show confidence and reduce the back-and-forth of negotiations.

While escalation clauses can be helpful in certain situations, they’re not always necessary and might complicate the process. It’s often better to focus on making a clean, strong offer that appeals to the seller without relying on automatic adjustments.

Appraisal Issues

Even if you don’t offer above asking price, appraisal issues can still arise.

Sometimes the property doesn’t appraise for the list price (also known as original asking price), even if your offer matches the listing. Since the appraiser’s valuation is a professional opinion, there can be differences between the price you’ve offered and the value the appraiser assigns.

If the property doesn’t appraise for your offer amount, it can create a challenge with your financing. Lenders will only loan based on the appraised value, not the offer price. This means if the property appraises for less than your offer, you’ll either need to make up the difference out of pocket or renegotiate.

The situation is different depending on whether you offered above, at, or below asking price.

Above – If you offered above the asking price, the likelihood of an appraisal issue is higher because most sellers and their agents are trying to list properties at the maximum they believe the property could appraise at. There are different strategies, but that’s probably the most common.
At – If you offered at asking price and the property doesn’t appraise, it signals that the property may have been overpriced to begin with.
Below – And if you offered below asking price and the property doesn’t appraise for even the list price, it suggests the market value is even lower than both you and the seller anticipated.

Appraisals are not exact science—they are the appraiser’s professional opinion of value. While appraisers use market data to justify their valuations, they often aim, consciously or subconsciously, to match the offer price.

However, if the value doesn’t meet or exceed the offer price, you have several options.

If the property doesn’t appraise for your offer price, check your contract to see what options you have. If you kept your full appraisal contingency, you typically have these choices:

Pay the Difference – You can accept the lower appraisal, pay the difference in addition to your down payment, and continue with the purchase.
Renegotiate – You can object to the appraisal and try to renegotiate the price with the seller. You might be able to get the seller to lower the price to match the appraised value or at least offer a discount.
Cancel the Contract – You can cancel the contract and walk away from the deal, usually with your earnest money refunded.

Keep in mind, by the time you reach this point, you’ve likely paid for an inspection and an appraisal. If you cancel, you won’t get those costs back, meaning you’ll have money in the deal that you can’t recover.

Inspection

Including an inspection in your offer is common and usually expected. In most cases, it’s a good idea to have an inspection to ensure the property is in good condition and that there aren’t any major issues.

However, waiving or limiting your inspection can strengthen your offer, especially in a multiple-offer situation. Sellers tend to prefer offers with fewer contingencies, and waiving or limiting the inspection shows that you’re serious about moving forward with the purchase without delays or negotiation over repairs.

There are scenarios where waiving an inspection makes sense, such as when buying a property in a highly competitive market with multiple offers or the threat of multiple offers. Waiving an inspection may also make sense if you plan to remodel the property anyway like with a fix and flip or BRRRR property.

If you’re not comfortable waiving a full inspection contingency, there are alternatives you can consider.

Some variations on how you can handle inspections include:

Pre-Offer Inspection – Have the inspection done before making an offer, so no contingency is needed.
Waiving Inspection Entirely – Skip the inspection altogether to make your offer stronger.
Post-Offer Inspection Without Termination Rights – Conduct the inspection, but agree not to terminate based on the findings.
Inspection With No Requests – Perform the inspection and keep the right to terminate, but agree not to request repairs or price reductions.
Limited Inspection for Health and Safety – Focus only on major health and safety issues, leaving out minor cosmetic concerns.

Keep in mind, waiving or limiting inspections carries risks. If issues are found later, you may be responsible for costly repairs. It’s important to weigh these risks carefully as they can be significant.

By adjusting your inspection terms, you can increase the chances of your offer being accepted while balancing the need to protect yourself.

Post-Closing Occupancy Agreements

A post-closing occupancy agreement allows the seller to remain in the property for a set period after closing.

This arrangement appeals to sellers who may need extra time to find a new home or coordinate their move.

It can make your offer more attractive by giving the seller peace of mind that they won’t be rushed out or give them the money they need to purchase their replacement home before they move out of this one.

There are important legal and logistical considerations when offering post-closing occupancy.

Once the sale closes, the seller becomes a tenant, and it’s wise to have a formal lease agreement in place to define the terms.

You should decide whether to collect a security deposit and what rent, if any, will be charged. Sometimes “rent” for the post-closing occupancy is baked into the offer price to buy their property.

It’s also important to consider what happens if the seller overstays the agreed period. Including penalties for overstaying and clear exit terms in the agreement will help protect you from potential issues down the road.

This agreement can offer flexibility to the seller, but make sure you’ve structured it properly to protect yourself.

Personal Letters & Broker Letters

Including a personal or broker letter with your offer can sometimes be an effective strategy, but it’s important to understand when and how to use them.

Writing a personal letter to the seller is often more common when purchasing a personal residence. Traditionally the goal has been to create an emotional connection with the seller by sharing your story or expressing your appreciation for the home. However, there are pros and cons.

The upside is that in some cases, the seller may feel more inclined to accept your offer, especially if multiple offers are similar.

But personal letters can backfire if the seller is focused only on maximizing their profits. Additionally, be careful about the content of your letter as certain topics could inadvertently trigger fair housing violations. For this reason, I’ve historically gotten permission from the sellers I represent to dispose of personal letters instead of forwarding them to the seller to protect them from possible fair housing violations.

For these reasons, we typically recommend focusing on your ability to perform and close the deal rather than trying to create an emotional appeal.

For Nomads™ buying multiple properties, a broker letter from your real estate agent can be especially helpful. These letters show that you’re an experienced investor who has successfully closed multiple transactions. Your agent might include statements like: “I’ve closed four purchases with this buyer in the last four years, and every deal has gone smoothly. You won’t have any issues working with this buyer.” This can reassure the seller that you’re reliable and the deal is likely to close without complications.

Focus on presenting your offer as strong and reliable by highlighting your financial qualifications. For investors, a well-written broker letter can often be more effective than a personal appeal, especially in competitive or multiple-offer situations.

Seller Concessions

Seller concessions are when the seller agrees to cover certain costs for you, such as closing costs. Asking for seller concessions can reduce the amount of money you need to bring to closing, which improves your return on investment (ROI). You should typically ask for concessions when you’re financing the property and believe the property will appraise for the full purchase price, including the concessions.

However, asking for seller concessions slightly weakens your offer because it means the seller nets less. For example, if you offer $300,000 with $5,000 in seller concessions, the seller effectively receives $295,000, compared to a buyer offering $300,000 without asking for concessions.

It’s generally not a good idea to ask for seller concessions if you’re offering above the asking price or if there’s a high chance the property won’t appraise for the full purchase price plus concessions. In these cases, it can make your offer less competitive and more likely to fall through if the appraisal doesn’t come in high enough.

Some real estate agents may not fully understand how or why to use seller concessions, so your agent may need to explain the benefits, especially if you’re a financially strong buyer. Even if you’re financially solid, asking for concessions can help maximize your returns.

For Nomads™ and house hackers, we typically ask for seller concessions because we’re often putting down smaller amounts. In these cases, receiving seller concessions can have a bigger impact by helping to cover closing costs, improving your return on investment and allowing you to save more capital for future investments.

If you’re unable to get seller concessions, another option is to ask your lender to raise your interest rate slightly in exchange for a credit that covers closing costs. This way, you still reduce your upfront cash needed to close the deal.

Due Diligence Requests

Requesting due diligence in your offer can demonstrate your competence as a buyer and show the seller that you’re serious about the transaction. It signals that you know what you’re doing and are preparing for a smooth closing. However, asking for too much can annoy the seller and make your offer less appealing.

Requesting excessive due diligence can weaken your offer because it creates additional work for the seller and gives you more opportunities to back out of the deal. Sellers want as few hurdles as possible, so loading your offer with unnecessary requests can make it less competitive.

Reasonable due diligence requests focus on things you can’t easily get on your own. For example, don’t ask for property tax amounts or utility bills if you can find that information on the county or city websites. Instead, focus on important documents like existing leases, tenant estoppel statements, and any agreements tied to the property, such as solar panel leases or HOA documents.

Conditional Sale Contingency

A conditional sale occurs when you need to sell your current property in order to buy the next one. This contingency can make it harder to get your offer accepted, especially in a seller’s market. Most sellers prefer not to tie the sale of their property to the successful sale of yours, as it adds uncertainty and delays. In a competitive market, with multiple offers on the table, sellers are less likely to choose an offer with this type of contingency.

As Nomads™, we typically don’t face this issue because we’re keeping our previous properties as rentals, so there’s no need to sell them before buying another property. This avoids the complexity of a conditional sale.

For some investors using a 1031 Tax-Deferred Exchange, there might be certain timeframes or contingencies involved. However, many investors are also keeping properties, so conditional sale contingencies are often not necessary.

In strong seller’s markets, getting a conditional sale contingency accepted is extremely difficult, particularly when there are multiple offers. Sellers are more likely to accept offers that aren’t dependent on another transaction.

If you’re in a situation where you need to sell your property before buying, consider these alternatives to avoid a conditional sale contingency:

Qualify for a new loan without selling your current property. If you can carry both mortgages, you won’t need the contingency.
In a hot market, sell your current property first, and ask the buyer to be flexible with the timeline while you find your replacement property.
Use a post-closing occupancy agreement for the property you’re selling. This allows you to stay in your current property for a set period after closing while you search for your next home, giving you more time to buy without needing a contingency.

By finding alternatives to a conditional sale contingency, you can make your offer more appealing to sellers and increase your chances of getting it accepted.

Flexibility with Closing Dates

Being flexible with the closing date can make your offer more attractive to sellers, especially if they need extra time to move or finalize their next purchase.

Sellers often appreciate buyers who are willing to adjust the timeline, as it reduces the pressure of aligning both transactions perfectly.

To offer flexibility while still protecting your own timeline, consider adding flexible closing date clauses in your offer or having your agent discuss this with the seller’s agent when presenting your offer. This allows for some wiggle room without committing to an open-ended timeline. It’s important to have a conversation with your real estate agent to make sure the flexibility works for both parties and doesn’t disrupt your plans.

One solution is to offer a post-closing occupancy agreement. This allows the seller to stay in the home for a specified period after the closing. This can be particularly helpful if the seller is waiting on their new home to be ready. You’ll need to discuss how much you’ll charge for the extended occupancy. This could be included as part of the purchase price or structured separately, with a customary amount charged if the seller stays beyond the agreed period.

If you’re a Nomad™, be mindful of owner-occupant financing rules, as most lenders require you to occupy the property within 60 days of closing. Make sure any flexibility or post-closing agreements don’t interfere with these requirements.

By offering flexibility and considering solutions like post-closing occupancy, you can create a win-win situation for both you and the seller, increasing the likelihood of getting your offer accepted.

Offer Acceptance Deadlines

When submitting your offer, the timing of your offer acceptance deadline is important.

Your agent will typically call the seller’s agent before submitting the offer to discuss when the seller will be available to review and sign. This allows you to set a deadline that aligns with the seller’s availability, ensuring they have enough time to carefully consider your offer.

Some buyers try to rush the seller into accepting quickly by setting short deadlines. While this can sometimes work, it usually only succeeds if your offer is exceptionally strong. In a situation with multiple offers and an established offer deadline, rushing the seller typically doesn’t work unless they feel your offer is too good to pass up. If your offer isn’t significantly better, the seller may prefer to wait for other offers.

The deadline only really matters if they are accepting your offer as it was written. If they are countering your offering on anything, then the deadline is meaningless. There will be a new deadline for the counterproposal.

There are times when setting a shorter acceptance deadline can be beneficial. For example, if the property doesn’t yet have multiple offers but has additional showings scheduled, you might want to submit a strong offer with a quick deadline. This can pressure the seller to accept your offer before other potential buyers have a chance to bid, allowing you to secure the property before competition increases.

The key is to balance urgency with respect for the seller’s process. Giving them enough time to review your offer while showing that you’re serious and ready to move forward can make a big difference in getting your offer accepted.

Offer Presentation

Presenting a clean, well-written offer is crucial to instilling confidence in both the seller and their agent. A well-organized, complete offer shows that you’re serious and capable of closing the deal without unnecessary complications. This type of offer immediately puts the seller at ease, making your bid stand out in a positive way.

Clarity and completeness are key. Double-check every detail to ensure there are no mistakes or missing information that could make your offer look sloppy or unprofessional. Errors or omissions can give the impression that you’re not paying attention, which can make the seller hesitant to accept.

Your agent should also call the seller’s agent to advocate for your offer. This personal touch allows your agent to explain the strengths of your offer and why it should be considered seriously. This can be especially important if you’re in a competitive situation with multiple buyers.

Timing your offer is another factor to consider. Submitting an early, strong offer with a short—yet reasonable—acceptance deadline can limit the seller’s ability to leverage your offer against others. Alternatively, you can wait until closer to the multiple-offer deadline, preventing your offer from becoming a benchmark for other buyers to beat. By submitting closer to the deadline, you reduce the chance that your offer is used to encourage higher bids from other potential buyers.

A clean, well-presented offer combined with smart timing can make all the difference in securing a property, especially in competitive markets.

Ultimate Guide to Making Offers for Real Estate Investors