How to Write a Winning Offer

May 26, 2021

Here are some tips and strategies that may help when writing offers in a competitive market. It's not always the offer with that highest price wins, all of these other things do matter!

Remember, if you fail, try try again. Never give up on your dream house!

1) Highest Price

Obviously, this is always going to be the most motivating factor for the seller.

2) Appraisal Gap Coverage

If the property does not appraise for the full purchase price, you can tell the seller that you are willing to pay a certain amount out of pocket to cover the difference between the purchase price and the appraised value. This amount is in addition to your down payment and closing costs.

Example: If you offer $400k and the property appraises for only $390k, if you don't offer any appraisal gap, the seller will be forced to drop the price to $390k if they don't want the sale to fail. If you offer $5k of appraisal gap, you would pay $5k and the seller will only need to drop the price to $395k. If the property appraises for the full $400k, then you don't need to pay at all so this clause would only be triggered when an appraisal issue arises.

See Appraisal Gap Explained for a more detailed explanation on how appraisal gaps work

3) Earnest Money

This should be at least 1% of the purchase price in the current market, higher if you want to be more competitive. The Earnest Money is due within a few days of an accepted offer and will be held in an escrow account by the title company (neutral 3rd party) and will be subtracted from your down payment amount at closing. The risk associated with offering more Earnest money is that you may lose it if you decide to back out of the transaction without a valid reason. For example, all the contigencies have been completed and you got "cold feet" and decide that you don't want to buy the house anymore, you may lose this earnest money as compensation to the seller for wasting their time and money.


Purchase price $400k with 3.5% FHA loan

Earnest money $5k

Amount of down payment due at closing would be $9k (3.5% of $400k is $14k)

4) Reduce the Inspection Period with the intention to buy the property in "As-Is" condition

The typical inspection period in Oregon is 10 business days after an accepted offer. You can offer to reduce this period to 5 days and tell the seller that you are intending to buy it in its current condition and use the inspection period for "educational purposes" only as a first time homebuyer. If there is something major that comes up (e.g. roof, foundation, etc.) , you can still negotiate or back out. Oftentimes with multiple offer situation, the seller would have accepted a strong backup offer so there is not a whole lot of negotiation room during the inspection period anyway. Including this clause in the initial offer will make your offer more competitive.

5) Quick Close

Offering a 30 day close is usually the best (check if your lender can do this) unless the seller indicates a different closing preference. Check with the listing agent to confirm.

6) Delay possession after closing date

Offer the seller some extra days to move out after you close on the property. This is only effective if the seller wants the extra time to move out. Again, check with listing agent to confirm if this will help.

7) Escalation Clause

Indicates that you are willing to pay a certain amount higher than the highest competing offer. This can be a good strategy for buyers who are afraid of overpaying for a property. However, sometimes the seller doesn't want to bother with dealing with escalation clauses and just wants to see your highest and best so be flexible. If the listing agent/seller says no escalation clauses, then don't force it on them. Confirm with listing agent before writing an escalation clause.

Example: You start at an initial purchase price $380k, and say you are willing to go up to $450k in $5k increments and the listing agent is required to provide written proof of the competing offer.

8) Pay for the seller's closing costs (escrow costs)

This would be an out of pocket expense for you so get an estimate of what the costs would be from the title company before considering doing this.

9) Write a letter to the seller

Remember, it's not always about the money, the seller may be more willing to work with you if they like you. Writing a "love letter" to the seller is discouraged by the National Association of Realtors but
it may help a little bit. Stay away from potentially discrimnatory topics such as Race, Religion, Gender, National Origin, etc. Focus more on the property itself. The letter does not have to be overly polished, just speak from the heart and be as genuine as possible. If you are not sure how to write a letter, there are plenty of resources online to help you, just do a google search!

10) For Tenant Occupied Properties

If you need to move into a tenant occupied property and require the seller to give the tenant a termination notice during the transaction, make it as EASY as possible for the seller. Many landlords have developed good relationships with their tenants and may feel guilty about giving them notice. Also, depending on the situation, the landlord may be required to pay a relocation fee to the tenant so make sure you address that in the offer (Example: Offer non refundable earnest money after the inspection period). If you accept the current tenants and write a letter to the seller, be sure to mention that you will treat the tenants ethnically after you close to let the seller know that the tenants will be taken care of.

11) Ask the Listing Agent

If you are working with a buyer's agent, be sure your agent asks the listing agent about what is important to the seller and if they have any suggestions. They might just say price but sometimes they might say something that hasn't occurred to you so factor that into the offer. Building a good relationship with the listing agent from the very beginning is important

12) Get Lucky!

Finally, yes you do need to get lucky to win a house with 10+ offers on it. However, I believe that it's important to put a lot of thoughts and effort into each offer to create oppportunities for you to get lucky. Those who work harder tend to get lucky more often. Good luck!!!