If you’re making an offer on a house, you may be exclusively focused on the price. But what if the seller gets two offers at the same price? What other elements of the offers will persuade them to accept one and reject the other? How do you make your offer stand out against the competition?
What Sellers Are Looking for in a House Offer
Yes, sellers are looking for a good price for their home, but they’re also looking for certainty, convenience, and a smooth process. When evaluating several offers at the same price, they’re asking themselves:
- Which house offer is most likely to close successfully?
- How much hassle will this buyer be?
- What are the chances that this buyer’s financing will fall through at the last minute?
- Is this buyer going to nickel-and-dime me over every small matter?
What Makes a House Offer Stronger?
Aside from the price, the following elements can make a house offer stronger (or weaker):
Conditions
Conditions or contingencies are riskier for the seller because they mean the deal could fall through if they’re not met. The most common conditions are:
- Financing: final approval of a mortgage or other type of financing.
- Home inspection: successfully passing an inspection for serious condition issues.
- Sale of current home: buyer must either have accepted an offer or fully closed the deal on their current home, depending on the wording.
- Status certificate review (for condos): status certificate must be acceptable to the buyer, showing no concerning debts, special assessments, major litigation against the condo corporation, etc.
- Insurance approval: buyer must be able to obtain a homeowner’s insurance policy for the property.
In competitive markets, buyers often minimize conditions to make their offer stronger. Does that mean you should waive all conditions? Not necessarily: waiving them means that if there are problems (ex, you can’t get financing or insurance), you might have to back out of the deal and forfeit your deposit.
Deposit Size
A larger deposit signals that you’re financially stable and that you’re confident about going through with the purchase. If yours is the only offer, a larger deposit may not make much of a difference, but if a seller is comparing two offers at the same price, the one with the larger deposit may seem more serious.
Financing Strength
A stronger offer has stronger financing. Financing strength can be ordered from strongest to weakest:
- All cash, which presents no risk to the seller, can close quickly.
- Preapproved financing with a large down payment (20%+).
- Preapproved with a minimum down payment.
- Prequalified but not preapproved.
The weakest financing in a house offer is none at all. If the buyer hasn’t even investigated financing, it signals a lack of preparedness. Sellers are much less likely to proceed with this type of offer.
Flexibility on Closing Date
Whether the seller has already bought another house and needs to close quickly or needs extra time to find a new place and coordinate their move, a house offer that accommodates their timeline is more likely to be accepted. Flexibility on the closing date means less hassle for them.
Your real estate agent may be able to find out what the seller’s ideal timeline is. If so, you can tailor your offer accordingly. Be realistic about what that means for you: whether you’ll need to find a place to live for a few months or require a bridge loan while you’re carrying two mortgages.
House Offer Letter
A house offer letter is a personal note that some buyers include about why they love the house and what it would mean to them to own it. A letter can make a difference if the seller is emotionally attached to the house and wants it to go to someone who will value and look after it. If the seller is an investor, a personal letter is unlikely to have an effect.
Inclusions and Exclusions
Which items are included and excluded from the deal doesn’t often make a difference, but it can if two offers are otherwise identical. No one wants to haggle over lighting fixtures or drapes.
Your Agent’s Reputation
If the listing agent knows your real estate agent is professional, reliable, and gets deals done, they might subtly favour your offer. There’s not much you can do about that when you’re making an offer on a house, but it could play a role when you’re initially choosing an agent to work with.
Comparison of Three House Offers
Here are three hypothetical offers on a house listed at $750,000. Which one is a buyer most likely to accept?
| Offer A: $765,000 | Offer B: $765,000 | Offer C: $765,000 |
|---|---|---|
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Even though all three offers are at the same price, Offer C is clearly the strongest, followed by Offer B. Offer A is the riskiest and the most inconvenient. Offer A could still emerge as the winning bid if they raised their house offer price, but they’d be paying more money to compensate for their weak offer.
How to Make Your House Offer Stronger Without Raising the Price
If you want your house offer to be competitive without necessarily spending more money, take these steps beforehand:
- Get fully preapproved before you go house hunting, and have your financial documents ready to show that you can close.
- Save for a solid deposit (5 to 10% if possible).
- Be flexible on your closing dates; ask your agent to find out what works best for the seller.
- Minimize conditions where it’s safe.
- Be reasonable about inclusions and exclusions.
- Choose your real estate agent wisely: work with one who has a good reputation locally.
- Come in with your best offer: don’t lowball the seller with the intention of raising your bid.
How to Make a Winning Offer
A strong house offer isn’t just about money; it’s about certainty, convenience, and the absence of drama. Sellers want to know that the deal is likely to close, that it’s going to be on their schedule, and that there won’t be a lot of back and forth about minor issues. The good news is that offering them that doesn’t cost anything: you just need to be well-prepared in advance. Work closely with your real estate agent to ensure that you put forward the strongest house offer you can.
