Know your market before you write a number
The most important thing you can do before making any offer is understand specifically whether you are in a buyer's market, a seller's market, or something in between.
In a seller's market — low inventory, multiple offers, homes selling above list — your offer needs to be aggressive on price, clean on contingencies, and fast on timeline. Lowball offers don't just fail, they signal that you don't understand the market.
In a buyer's market — high inventory, homes sitting, price reductions common — you have leverage. Offer below list, ask for closing cost credits, request repairs, take your time.
Your agent should tell you the average days on market, the list-to-sale price ratio, and the number of competing offers on recent comparable sales before you write anything.
The price is only one part of the offer
Sellers care about more than the highest number. They care about certainty — the confidence that the deal will actually close. An offer $10,000 below the highest bid can win if it comes with a larger earnest money deposit, a clean financing contingency, and a closing timeline that matches what the seller needs.
Earnest money. The standard is 1% to 3% of the purchase price deposited within days of acceptance. Offering more — 5% or above — signals serious commitment and differentiates your offer.
Closing timeline. Ask the seller when they want to close and match it if you possibly can. A seller moving into a new build that won't be ready for 60 days doesn't want a 30-day close. This information is almost always available if your agent asks.
Escalation clauses. In multiple offer situations an escalation clause automatically increases your offer above any competing offer up to a maximum you set. It tells the seller you're serious without requiring you to bid against yourself blindly.
Contingencies — what to keep and what to negotiate
Keep the inspection contingency. Always. You can limit it — agree to only request repairs above a certain dollar threshold — but never waive it entirely.
The financing contingency protects you if your loan falls through. If you are well qualified with a strong pre-approval you can shorten the financing contingency window to signal confidence without waiving it.
The appraisal contingency protects you if the home appraises below the purchase price. In a hot market sellers often ask buyers to waive this. Only do this if you have the cash reserves to cover a potential appraisal gap.
The bottom line
A competitive offer is a complete package — price, earnest money, timeline, contingencies, and presentation — designed around what this specific seller in this specific market actually needs. The buyers who win aren't always the highest bidders. They're the most prepared.
Research comparable sales and neighborhood price trends on WYLT before you make your offer.
In a buyer's market, where inventory is high and homes are selling below list price, flexibility on closing costs and repairs can be a key differentiator. Consider offering to take on some or all of the closing costs, or being open to negotiating on repairs and credits. This can be especially effective in markets where sellers are motivated to move quickly, such as in areas with high vacancy rates or where new developments are being built. For example, in a market like Chicago's South Loop, where condo inventory is high, a buyer who is willing to be flexible on closing costs and repairs may be able to negotiate a better price.
When making an offer, data on nearby sales and market trends can be a powerful tool. Look at recent sales data for similar homes in the area to determine a fair market price, and consider factors such as days on market, price per square foot, and seller concessions. For instance, if nearby homes are selling for an average of $400 per square foot, and the home you're interested in is priced at $425 per square foot, you may be able to make a stronger case for a lower offer. Additionally, working with a knowledgeable real estate agent who has access to this data and can provide guidance on local market conditions can be invaluable in making a competitive offer and securing your dream home.
