Tips For Writing an Offer to Purchase in Real Estate

You’ve finally found your dream home and are ready to make an offer. Congratulations! What’s your next step?

It’s your offer letter which is also known as the offer to purchase contract.

It’s no secret that we are currently in a hot seller’s market. As a buyer, that means you’ll be facing strong competition for any home you might want to bid on. And one thing that could help you stand out in a sea of buyers is your offer letter.

To help you purchase your “forever” home, we’ll explain exactly what you should include in your offer letter. By the time you’re done reading, you’ll know how to write a winning real estate contract.

What Is an Offer Letter?

An offer letter is simply a written expression of your intent to purchase a property. It isn’t a contract, per se, but your offer letter is a legally binding agreement.

Because the offer letter is crucial to your home purchase, you should work closely with your Realtor on the details you include. You might even want to consult a real estate attorney.

There are several elements that you should always include in an offer letter:

  • Offer Price
  • Closing Date
  • Earnest Money Deposit
  • Financing
  • Contingency Clauses
  • How Long the Offer Stands
  • Personal Letter

Below, we’ll take an in-depth look at each of these.

Offer Price

This is the exact amount that you are willing to pay for the property. You can meet the seller’s asking price offer over or below their listing price.

This will be the first thing that a seller looks at in the offer letter, so consider carefully how much you want to offer. In the current seller’s market, you will have difficulty being the winning offer if you go below the asking price. In fact, many homes today are selling well over their listing price.

Closing Date

Let the seller know when you would like to close on the house. Both buyers and sellers ask how long it takes to close from the time an offer is accepted. If everything is in order, this is usually between 30-60 days from the acceptance of the contract.

However, if you know that the seller is in a hurry to relocate, offering to close sooner can sweeten the deal and make it more likely for the seller to accept your offer.

Earnest Money Deposit

Earnest money functions as a down payment on the house. It signals to the seller that you are serious about purchasing their home.

Typically, the earnest money is 1% to 5% of the home’s purchase price. As a buyer, you’ll put the money into an escrow account, where it is held until the closing. Then, when you close on the home, the earnest money is released from escrow and applied towards the down payment.


Along with the offer price, here is another opportunity to make your offer letter shine. Having your financing in order shows the seller that your offer can be taken seriously.

Be sure to include:

  • How much you plan to put towards a down payment. The typical amount is 20%.
  • What type of loan you’ve been pre-approved for, and how much.

If you haven’t been pre-approved for a mortgage, sellers might not accept your offer. In a hot market, they will receive multiple offers. An offer that doesn’t include financing won’t be as appealing as those that are already approved.

Contingency Clauses

Every contract should contain contingency clauses. These are your safeguards. If they aren’t met, having them in the contract allows you to walk away from purchasing the home without any further obligation. Most importantly, contingency clauses will stipulate the return of your earnest money deposit, should the sale fall through for any of the reasons listed.

You can write whatever contingency clauses you’d like. It’s up to the seller to accept it or not.

In this current seller’s market, many offers are being made without a contingency clause. While it may help you get the seller’s attention, it also leaves you unprotected if anything goes wrong.

At the very least, here are some of the contingency clauses you should consider.

Appraisal Contingency

This is one of the most common contingency clauses. It simply requires that the home be appraised for a minimum amount that you specify in writing. If it doesn’t, you will have the right to terminate the contract.

Financing Contingency

Even if you are pre-approved for financing, this is an important contingency to include. If your employment or financial situation changes, you might not secure the loan. A financing contingency allows you to back out of the contract and reclaim your earnest money if that should occur.

In your financing contingency, include the loan amount and terms. You should also specify the number of days you have for obtaining your mortgage.

Home Sale Contingency

If you need to sell your current home in order to afford the new home, a home sale contingency is crucial. This clause states that you must be able to sell your home for a minimum, specified amount of money within a certain time period. If not, you can terminate the contract, and the house goes back on the market.

This contingency is not ideal, and sellers may reject it. Most of the time, it’s something you shouldn’t do when trying to buy a house. But unless you can balance two mortgages, a home sale contingency is worth considering.

Inspection Contingency

No matter how good a home looks, a home inspection is where you find out its true condition. With an inspection contingency, you retain the right to terminate the contract if the inspection returns any major issues.

If the inspection does report that there are major repairs needed, you should have your options covered by the inspection contingency:

  • Seller pays for repairs, and the sale continues.
  • The buyer pays for repairs, and the seller reduces the price
  • Seller refuses to make repairs, and the contract is terminated

How Long the Offer Stands

No matter how badly you want the house, you should specify the time period in which the seller can reply to your offer. You don’t want to be stuck in limbo for days or weeks on end while they wait for better offers.

Personal Letter

A personal letter (sometimes called a love letter) can tell the seller a bit more about you and help them see why you would be the best buyer for their home. Remember, to the sellers; this isn’t just a piece of property; it’s their home. They want the next person who lives there to love it as much as they did.

However, you’ll have to be very careful about what you put in your personal letter. With the Fair Housing Act, anything that can be used to determine whether you’re part of a protected class is not allowed. In fact, many Realtors will refuse to deliver a personal letter because they don’t want to risk violating the NAR Code of Ethics.

Still, if you keep it neutral, it can be the one thing that really wins over the sellers.

Here are some tactics to use in your personal letter:

  • Address the seller by name
  • Compliment their home, but be genuine
  • Share something about yourself
  • Let them know how excited you are about the house
  • Remind them about your financing
  • Keep it short and sweet

Even though the market is hot right now, you can still place a successful offer. Follow our offer letter tips to impress the seller, and you’ll be moving into your dream home in no time!

Hopefully, you have enjoyed what you need to know about writing a real estate contract.

About the author: The above article on how to write a winning offer letter was written by Anna Compagine Cohen.Anna Compagine Cohen Anna is a Content Writer at UpNest, where agents compete, and you win.

Anna has an extensive background in the real estate industry. She is a published author who specializes in real estate, personal finance, travel, and wellness. When she’s not writing, Anna can be found reading, walking on the beach, or spoiling her teenagers and their rescue dogs.