The Anatomy of an Offer: How to Evaluate A Home Offer

Getting an offer is the goal of listing your home but understanding each element and what you are willing to accept before you market your home, will make negotiations go a lot smoother. 

We’ve broken down home offers into 2 sections, time and money. You should consider both before accepting or countering. 

Net Price 

There is more to price than just the “price”. You’ll need to look at a few elements of the offer to get a clear picture of the bottom line.  


Every offer will include a price. Ideally, this amount would be the full list price, but if it’s not you’ll need to know your bottom line beforehand. Having a defendable price will give you the confidence to counter or decline when the price isn’t what you expected. 

Closing Costs and Pre-Paids 

Traditionally closing costs are paid by the buyer, but more often we are seeing offers include asking the seller to cover them. In fact, when marketing to first time home buyers preparing to pay for the buyers closing costs is attractive if you can afford it. Closing costs can run from 2.5 to 3% of the purchase price and will typically be capped at a dollar amount on the contract. 

Buyers may offer full price but ask for 3k in closing costs. Keep in mind this would effectively lower the bottom line at closing by 3k. 

Other items that buyers may ask for in an offer that would affect the bottom line include: 

Home Warranty: Home warranties typically run from 450 to 650 and if there is one being purchased, it’s usually purchased by the seller. This again affects the Net Price.

Allowances: Allowances are not typically asked for and when it is its usually because the house is in need of some sort of repair or updating (you should be aware of this already)

Items Reserved:  These are the items that you wanted to reserve yet the seller is asking for them. If they are asking for the fridge and it’s worth 2000 then that it affects your net price by subtracting the $2000.

1. Timeline 

Second to the price is the timeline included in the offer. When you are selling your home time is important. Knowing the current market demand before listing your home for sale will give you confidence on whether to turn down an offer based on the timeline. 

Here are the things you’ll need to look out for:

Contingent on home selling:  This means that the buyer needs to sell their home before they can purchase yours. Accepting this kind of offer could increase the timeline by months. You’ll want to understand more about the home they need to sell and the likelihood of it moving quickly before accepting this offer. However, if there isn’t much demand for your type of home you may appreciate locking up a buyer and accept. 

Financing Type: Most residential homes are bought with a mortgage, and they take about 30-45 days to get. As a result, that’s the timeline you can expect to see on a contract. Cash offers can be done in as little as a week but often two. And government-insured loans like FHA and VA or USDA rural development can take longer between 40 and 50 days. 

Other dates included in the contract are below to give you an idea of what’s typical. 

Offer Expiration: This is the amount of time you’ll have to either accept or counter. This is typically within 1 to 2 days usually but can be up to a week. It’s not uncommon for buyers agents to submit offer late into the evening or on weekends. All the more reason to have discussed what a good offer looks like beforehand. 

Pre-approval Letter: This is the amount of time the buyer has to deliver a letter from their lender stating they are approved to purchase a mortgage for the home. It’s typically 3 to 5 days. As a seller, you’ll want to make sure you have this before accepting it. 

Inspection Timeline: This is the amount of time the buyer has to inspect the home. Typically it’s anywhere from 10-15 days. 

Financing Approval Date:  This date marks the end of the time period to get their financing approved. This is done after the lender appraises the home before approving the mortgage. It is typically within 1 to 2 weeks before the closing date.

Closing Date: This is the day you actually sell your home. If the buyer is financing the purchase with a traditional mortgage it’s normally 30 to 40 days but could go up to 50 its a VA or RD loan.