Submitting an Offer on a Home: What Goes Into It and Why

Before drafting any offer, research the property thoroughly. Review the listing history, look at comparable sales (called "comps") in the neighbourhood, and assess the home's condition based on what you've seen during showings. Understanding the local market conditions — whether you're in a buyer's or seller's market — directly affects how you price and structure your offer. See our buyer's due diligence checklist to make sure nothing critical gets overlooked before you commit.

Your offer price should be grounded in comp data, not just what you're willing to pay emotionally. In a competitive market, offering at or above list price may be necessary. In a slower market, there may be room to negotiate below asking. Understand that the difference between a buyer's and seller's market shapes every negotiation — your strategy should reflect current local conditions, not a generic rule of thumb.

Earnest money — sometimes called a good faith deposit — is a sum you commit upfront to show the seller you're serious. It's typically held in escrow and applied toward your down payment or closing costs at closing. The amount varies by market but commonly ranges from 1% to 3% of the purchase price. If you back out of the deal for a reason not covered by a contingency, you risk forfeiting this deposit.

Contingencies are conditions that must be met for the sale to proceed. The three most common are:

• Financing contingency: Allows you to exit if your mortgage loan is not approved.
• Inspection contingency: Gives you the right to have the home professionally inspected and to negotiate repairs or withdraw if serious problems are found.
• Appraisal contingency: Protects you if the home appraises below the purchase price, so you're not locked into overpaying.

Each contingency has a deadline — typically expressed in days — by which you must act or the contingency expires.

The closing date is when ownership legally transfers and you receive the keys. Most closings take 30–60 days from accepted offer to completion, though this is negotiable. Some sellers need a longer timeline to find their next home; others want to close quickly. Flexibility on this date can make your offer more attractive without costing you money. Possession — when you physically get the keys — is also negotiable and sometimes differs from the closing date.

Your agent will compile all terms into the formal purchase and sale agreement. Read the entire document carefully before signing — not just the price. Pay attention to deadlines, what personal property (appliances, fixtures) is included, and any seller disclosures already attached. Once signed by both parties, the document becomes a binding contract. For a broader view of what happens next, see our overview of the home buying journey from offer to closing.