Back to Home Buying

What is it really like to make an offer on a home?

how to make an offer

If you plan to buy your first home, the feeling you get every single time you see an acquaintance share a family photo in front of their new house on Instagram probably sparks further motivation to reach the same milestone. That, or you suddenly can’t help but wonder how they accomplished such a substantial goal. 

Either way, asking someone how much they paid for their new home doesn’t exactly scream appropriate. If you have found your dream home and want to make a move, but aren’t sure what that entails — it’s time to find out.

Finances always come first in home-buying

rate hold. get it in writing.  avoid rental fraud by using a written contract

Spoiler alert: before you make any offers, you need to have your finances in order. James Knull, an Edmonton-based real estate investor, says that the first step to buying your first home is mortgage pre-qualification and a solid understanding of what your purchasing power is. In other words, how much can you afford

“It’s not a lot of fun to shop in the wrong price range,” says Knull. 

Check out a mortgage calculator for a preliminary understanding of what you need to know about your finances, and then speak with a mortgage professional to get a realistic idea of your affordability. Lenders will want to know basic financial information about your debts, assets and income. These numbers will give you a budget ballpark and determine whether or not you can afford a home loan. Once you are pre-qualified for a mortgage, it’s time to start the house-hunting process. 

How can you decide on your initial offer?

Let’s say you’ve handled your financial situation, and you’ve found your dream home. Now what? Making an offer on a home can be quite the thrill for a first-time homebuyer – and I say that from first-hand experience. So, let’s get to know the actual process of what it’s like to make an offer and close the deal.

If you have a real estate agent to help negotiate on your behalf, the first thing you should do is ask them for a market analysis as well as sold price history. The list price on a home is what the seller is asking for, whereas the sold history will show what a previous buyer or buyers paid. It’s also a good idea to look at other homes in the neighbourhood to get a better understanding of the market analysis presented to you by your Realtor and to help you get a better idea of what your initial offer should be. 

Once you’re aware of the market, consider the home condition, how long the property has been on the market, and what the seller’s situation is at that time. All of these factors will influence the offer.

Knull suggests you don’t overthink your offer, because at first, it’s just that – an offer. 

“Think of it as a reservation on a home.” The introductory offer you make on a home doesn’t mean it’s yours. However, you do want to ensure that you’re comfortable with the price you offer, and the conditions provide you time to do your due diligence on the off chance that your offer is accepted immediately.

“A little bit of back and forth on every single residential purchase is a very normal part of the process. Don’t feel intimidated by it,” says Knull.

How does negotiation work?

Negotiations don’t need to be stressful, especially if you’ve hired a real estate agent on your behalf. Just as you would with a salary negotiation, it’s time to sell yourself to prove to the buyer that you’re serious. If you have pre-approval, a reputable lender and are willing to put a deposit on a home, you are a great candidate to sellers. 

Your real estate agent will communicate with the seller’s agent to share the amount you are willing to offer for the property. From there, your real estate agent will wait to hear back from the seller’s agent on whether or not the offer is accepted, declined or countered.

In real estate negotiations, there are no limits on the number of counter offers both the buyer and seller can make. There are also no limits on what you can negotiate. Be prepared for the reality that your offer may go back and forth upwards of five times before finally being accepted — or worse — declined. Negotiations can be done in one day or on the flip side, take upwards of one week. 

An important thing to note is that you must make official offers in writing. “Oral promises are not enforceable by law,” says Milya Davidov, Zolo real estate agent. 

What should your offer include? 

A purchase offer, once accepted, becomes a binding sales contract, otherwise known as a purchase agreement. Davidov confirms your offer will need to include the following items:

  1. The purchase price of the home
  2. The municipal address and legal description of the property
  3. The terms of the purchase – The purchase of the property can be subject to a buyer obtaining a mortgage, or complete all-cash. 
  4. The deposit amount – Typically, buyers will put down around 5% of the purchase price, and apply that amount to the sale of the home upon closing. Deposits also show the seller that you’re a serious buyer.  
  5. Conditions of the purchase – These conditions include items that will have to be completed or fulfilled before closing. For example, obtaining a home inspection or selling your existing house. You can also list things you want the sellers to complete before taking possession, such as: getting the home professionally cleaned, or having certain damaged items repaired. 
  6. Inclusions or exclusions – You must specify in the purchase offer if there are certain items in the home that you wish will remain. This can be anything from window coverings and lighting fixtures to appliances. Sellers can also list items that they want to exclude from the sale, such as keeping a hot tub. 
  7. The official possession date – The closing day, in which the title of the property transferred legally, is when funds are successfully transacted. The keys are assigned, and the new homeowners can move in.

What happens after your offer is accepted?

Snug Warm Family Houses Side By Side. Residential House With The

Once the offer is accepted, the property will now be considered “conditionally sold.” A conditional sale means that the conditions you included in your written proposal are met before the closing or possession date. Typically, conditions include mortgage approval and a satisfactory home inspection. 

As a buyer, the next thing to take care of is your closing costs. You need to be prepared to pay the deposit (if required), home inspection fees, mortgage insurance if you are putting down less than 20% on the home, legal fees and disbursements, land transfer tax (depending on the province you reside in) and title insurance. 

You should also consider prepaid property taxes, utility bills and the cost of property insurance. 

After consulting with our real estate agent and putting in our first offer, we had countered with the sellers four times before the price was officially accepted. Negotiations started at 4:00 pm on a Friday and ended at 11:30 pm. In just 7.5 hours, we went from “potentially finding our home” to sending a $10,000 deposit to the sellers to make the transaction official. 

The process of making an offer on a home can be slow, or in our case, extremely quick. For us, having a real estate agent there to help us handle the negotiation and ensure the terms and conditions we needed — such as a tight turnaround in possession date – was vital. Making an offer on a home requires a compromise between a buyer and a seller. But, in the end, if your offer is accepted, everyone wins. 

Image of Alyssa Davies

Alyssa Davies

Alyssa is an award-winning personal finance blogger and founder of She writes about being a mom, overcoming personal debts, and how to get away with affording your ridiculously expensive latte habit. A new homeowner, Alyssa brings her real-life knowledge of the Canadian real estate market and smart money matters to this growing brand.