How to Evaluate an Offer

Dated: 08/01/2019

Views: 84

How to evaluate an offer

At first glance it seems like an easy assessment. When reviewing offers on your home, you should accept the one that offers the most money. However, there are a few other important factors other than price to consider when evaluating offers on your home.

Earnest Money

The earnest money deposit is the money that a buyer supplies to the seller as a good faith payment and assurance of intent to buy the home. This earnest money will be put towards the down payment of the house when the house is closed. If, however, the buyer backs out of the deal for a reason not listed in the contract, the seller keeps the earnest money. Consequently, the higher the earnest money, the stronger the offer.


Contingencies are essentially the exit doors a buyer has from the contract. These items are the reasons for which the buyer can decide not to go through on the the purchase of the home. The most common contingencies are the home inspection and financing. However, there can also be contingencies for the buyer selling his home or clearing the title. However, the greater the number of contingencies, the greater the number of exit doors, and the weaker the offer.

The Down Payment

The size of the down payment is often an indicator of the financial fitness of the buyer. If the buyer has a sizeable down payment available, there is a greater likelihood that financing will not be an issue in the closing of the house. Similarly, small down payments may bring into question whether a financing contingency will be met for the home.

The Closing Date

The typical length of time to close a home is currently around 45 days. However, if someone is making an all cash offer, he may be able to close much quicker. You may have the desire for a long or short closing. For example, if you're still looking for your next home you may desire a long closing period. However, if you've already purchased a new home you will likely want the quickest close possible. The length of closing may be the deciding factor for you between two similar offers.

Blog author image

Tricia McCullough

From farming in Warden, WA, to living in Australia and then back to Wenatchee, I’ve always been profoundly aware of the fundamental need to help others. Whether through their financial picture or he....

Latest Blog Posts

Free Seminar: Do you suffer from Real Estate FOMO?

As a part of our commitment to "Make Real Estate Great Again," we are committed to providing great and helpful resources to our community. We know real estate decisions can often be confusing and

Read More

How to lower your heating costs in winter

Even though in this valley we have some of the most affordable power rates in the country, many are looking for ways to decrease the winter heating bill. With temps dipping quite low in recent,

Read More

5 Unlikely Areas that Make a Big Staging Impact

When it comes time to sell your home, staging is all the rage these days. Potential buyers expect to see a well-groomed property similar to what is shown everyday on home makeover shows on TV. There

Read More

How to buy a house when you have student loans

Student loans are simply a part of reality for many adults today. However, when it comes to buying a house, the prospect can be quite intimidating when you also have student loans. If you're

Read More