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  • Scott Westfall

4 Essential Elements to Making an Offer on a Home in 2021

Updated: Feb 5

When making an offer on a home, knowing how to craft it well can be the key to securing your dream house. For a first-time homebuyer, especially in a competitive market like that of Hampton Roads, actually submitting that first sales contract to the seller can be daunting.


Before you make an offer, familiarize yourself with the important pieces of a purchase agreement to make sure you’re bidding with confidence. Let’s take a look at the four important elements of making an offer on a residential property.


Looking for a trustworthy real estate professional to help buy your next home? Here’s why a real estate consultant is the perfect partner when buying your home in Hampton Roads.


4 Essential Elements of a Purchase Offer

1. Money

It’s not just the buyer who has financial considerations to make during a home purchase. Both the seller and the person purchasing a property must look at several monetary components before signing a purchase agreement:

  • Purchase Price: The most notable part of your offer will be, of course, the amount of money you’re proposing to pay for the home.

  • Your Financing Plan: The seller will need to know that you are prepared and able to secure the proper financing to pay for the property. For example, have you been approved for an adequate loan? Do you have cash for a down payment? Have you been pre-approved?

  • Earnest Money Deposit: Also known as the EMD, the earnest money deposit shows you are serious about purchasing the property. The EMD amount can range from $1,000 to 10% of the purchase price. Typically, this money is placed in an escrow account (usually through your Realtor’s® brokerage). Once the seller has accepted your offer, the earnest money is applied towards your closing costs or down payment at closing. If your offer isn’t accepted or you walk away due to a covered contingency, you’ll get this money back. However, this money won’t be returned to you if you default on the contract.

  • Closing Costs: Covering items like property taxes, title fees, loan-related fees, and insurance fees, closing costs are something to consider early in the offer-crafting process. The amount of closing costs you can expect to pay varies based on loan type, the time of month that you close, property taxes, and even how much you put down on the loan. On average, these costs range between 2-5% of the loan amount. In your offer, consider the atmosphere of the current housing market when suggesting how closing costs will be paid. Standard purchase agreements state that each side of the transaction will pay their own closing costs, but that’s not always the case. In a buyer's market where demand is low, it is common to find the seller will pay some (or even all) of the buyer’s closing costs. In a seller’s market when inventory is low, it is more likely that each side will cover their own costs. P.S. We have an awesome guest post that further explains closing costs written by First Heritage Mortgage. Check it out.

  • Inspection Costs and Utilities: Buyers can typically expect to pay for inspection costs themselves. While sellers are responsible for revealing any major issues with the property (leaky roof, faulty wiring, mold, active water damage, etc.), buyers are responsible for digging deep before purchasing a property. However, the seller is usually responsible for keeping the utilities on and running throughout the buying process. These things can be negotiated in an offer, but these are the standard.

Bidding on a house in a competitive market? Check out this post with tips on how to win a home that has multiple offers on it.

2. Contingencies

Making an offer on a home is not usually a simplified process. Most real estate contracts have contingency clauses that define a condition or action that must be met for the offer to go through. Here are some of the big ones that we see during sales in Virginia Beach and other locations:

  • Home Inspection: The most common contingency is a home inspection. This allows the buyer to have a professional home inspection conducted and, if necessary, request repairs from the seller or to terminate the agreement at no penalty if something notable turns up.

  • Moisture & Termite Inspection: If you are obtaining a loan, this contingency is a must. All lenders require a clear moisture & termite letter before they will finalize a loan. This inspection is separate from the home inspection and is conducted by a licensed moisture and termite expert.

  • Appraisal: When using any standard type of mortgage, your offer must be contingent on an appraisal. Banks require a professional appraisal to confirm that the value of the home is equal to or greater than the purchase price (and therefore the loan amount). An important note: the appraiser may require repairs before they will provide a clean appraisal.

  • Loan Contingency: If you are obtaining a loan, ensure that your offer is contingent on securing your financing. If you lose your job two weeks before closing and can no longer get a loan, this clause ensures you will not be penalized.

  • Review of HOA, POA or Condo Association Documents: When buying a property that is a part of a homeowners, property owners, or condominium association, it is wise to make your offer contingent on reviewing the condo resale package. This allows you to terminate the agreement after you have been given time to review the association’s governing documents, as well as obtain a resale certificate showing any past association dues and pending or unpaid violations, assessments, or fees that will be due at closing.

  • Sale of Your Current Home: If your financing is dependent on selling your current home, you may need to make your offer contingent on getting an offer on your property.

  • Viewing the Property: In some cases, you might be making an offer before you, your spouse or other invested parties have had a chance to view the property in person. If you live out of state but want to show your serious interest, you might use this contingency before you can view it. This one is also used when a seller doesn’t want to disturb current tenets with viewings unless the buyer shows genuine interest by making an offer.

  • Other Inspections: Depending on the property, you may make your offer contingent on completing other inspections, such as inspections of a well, fireplace or chimney, boat dock, or foundation.

3. Timing

Timing is another key component in creating your offer on your dream home. There are several time-based items to consider:

  • Closing Date: There are a lot of factors that could be driving your ideal closing date. In general, a “quick” closing is considered to be about 30 days. To settle any sooner than that typically requires a cash offer, as financing can take some time to come through. If you don’t have a specific move-in date in mind, ask the listing agent what the seller’s ideal closing date would be.

  • Inspection & Contingency Completion: If you're including contingencies, such as getting an offer on your current home or completing inspections, it's a good idea to state by when these contingencies will be resolved. Sellers generally want these to be completed as soon as possible in case you decide to walk away, so they can get the property back on the market.

  • Delivery and Review of HOA (etc.) Documents: The buyer always has three days to review these documents once they are received. During that review period, you have the freedom to walk away from the deal without penalty. Savvy sellers will get these documents from the association as soon as they can, though there’s not a specific timeline for when they must produce them.

  • Life of Your Offer: Depending on the pace of the market, you may also specify in your offer how long the seller has to respond to you before your offer is automatically rescinded.

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4. Disclosures

Depending on the state in which you live, there will be several different disclosures provided by the buyer in which you will be required to review and sign. These are typically addendums to the purchase agreement, like your contingencies may be. The most common disclosures in the Hampton Roads, Virginia area are:

  • Lead Paint: It’s become common knowledge that lead paint can mean kidney damage, brain damage, and anemia (to name a few) for those exposed - especially young children. Sellers are required to disclose that there’s lead paint on the property if they have knowledge of it. (Homes built after 1978 are not subject to this disclosure, because lead paint was made illegal that year)

  • Brokerage Relationships: Do you have an agent? Does the seller have an agent? Chances are both agents work for a specific brokerage that is a vested party in the sale. This disclosure states which brokerage is representing you as the buyer and which is representing the seller.

  • Military Aircraft Noise or Accident Potential Zone: Homeowners in Hampton Roads are very familiar with this one. If the home you are buying is located near a military aircraft installation, the seller is required to tell you the level of noise the jets and other planes may make as they fly by. They also need to make you aware of any low-fly zones as there could be an increased risk of aircraft accidents or jet fuel dropping.

  • Defective Drywall or Pending Violations: Sellers must disclose the known use of defective drywall - a rare but real issue - and any pending building or zoning violations for the property so you aren’t caught unaware.

Putting it all together & submitting your offer

Once your agent has helped you put together all of the signed documents, they will send everything, including a copy of your pre-approval letter from your lender and a photocopy of a check for the earnest money deposit, to the listing agent. Once this happens, you have officially made your offer to the seller. Congrats and Good Luck!


The Bottom Line

Making an offer on a home requires attention to many details, but with the right real estate professional on your side, your offer can be airtight and work for you.


Make sure to spend time considering the costs, contingencies, timing, and disclosures before signing your purchase agreement. Every minute is time well spent.

About the author and CGP:

Scott Westfall is a licensed real estate broker with Broadsight Realty in Virginia Beach and owner of CGP Real Estate Consulting. CGP’s blog exists to give clients in Hampton Roads and beyond the power to buy, sell, and invest with confidence. To contact Scott directly and learn more about buying or selling a home with CGP Real Estate call or text (757)375-4550.

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