Your offer price should reflect current market conditions, comparable sales data, property condition, and your maximum budget. In a balanced market, offers typically range from 95-100% of the asking price for properties in good condition that are reasonably priced.

Pricing Strategy Considerations:

• Overpriced Listings: If a home has been on the market beyond the average days-on-market for your area, the seller may be more motivated and willing to negotiate below asking price.
• Fresh Listings: Properties just hitting the market often receive the most attention. If you love a newly listed home, be prepared to offer close to or at asking price.
• Multiple Offers: When competition exists, you may need to exceed asking price. Your agent can help you determine how aggressive to be based on comparable sales data.
• Condition Factors: Homes needing significant repairs justify lower offers. Calculate repair costs and factor them into your pricing strategy.

Remember: Your pre-approval letter establishes your upper limit, but you’re not obligated to offer the maximum amount you’re qualified to borrow. Stay within your comfortable budget range.

Earnest money is a good-faith deposit submitted with your offer, typically 1-3% of the purchase price. This money goes into an escrow account and applies toward your down payment and closing costs at closing.

Why It Matters: Larger earnest money deposits signal serious intent and financial capability. In competitive situations, increasing your earnest money deposit can strengthen your offer without raising the purchase price.

Protection: Your earnest money is refundable if you withdraw from the transaction within the terms of your contingencies. If you back out without valid contingency protections, the seller typically keeps the earnest money as compensation for taking the property off the market.

Your financing method significantly impacts how sellers view your offer:

Cash Offers: Cash purchases eliminate financing contingencies and appraisal requirements, often closing in 2-3 weeks instead of 30-45 days. Sellers strongly prefer cash because it removes the risk of loan denial.

Conventional Loans: These typically offer the most flexibility with down payments ranging from 3-20%+. Conventional financing is viewed favorably by sellers, especially with substantial down payments and strong pre-approval letters.

FHA Loans: FHA loans allow down payments as low as 3.5% but require stricter property condition standards. Some sellers hesitate to accept FHA offers due to additional inspection requirements and potential repair negotiations.

VA Loans: Veterans using VA financing offer zero down payment, but like FHA loans, VA appraisals have specific property condition requirements. Despite this, many sellers appreciate working with veterans and view VA offers favorably.

Contingencies are conditions that must be satisfied for the sale to proceed. They protect buyers from unforeseen problems but can make offers less attractive to sellers.

Financing Contingency: This protects you if your lender denies your loan application. The contingency period typically lasts 30-45 days, giving your lender time to complete underwriting and approve your loan.

Inspection Contingency: This allows you to hire a professional home inspector to evaluate the property’s condition. If significant defects are discovered, you can negotiate repairs, request a price reduction, or withdraw from the contract. Standard inspection periods are 10-14 days.

Appraisal Contingency: If the home appraises for less than your offer price, this contingency allows you to renegotiate the price or withdraw. Lenders won’t loan more than the appraised value, so this protects you from overpaying.

Home Sale Contingency: If you need to sell your current home before buying, this contingency makes your offer conditional on your home sale closing. Sellers often view these contingencies unfavorably because they introduce significant uncertainty and delay.

The proposed closing date can make or break your offer. Sellers have varying needs—some want to close quickly while others need extended timelines to find their next home or coordinate moving logistics.

Standard Timeline: Most conventional financed purchases close in 30-45 days. This allows time for inspections, appraisals, underwriting, and final loan approval.

Flexible Closing: Ask your agent to determine the seller’s preferred timeline. Offering flexibility on the closing date—especially if you can accommodate the seller’s schedule—can differentiate your offer from others at the same price point.

Rent-Back Agreements: Sometimes sellers accept your offer but need extra time before moving. A rent-back agreement allows the seller to remain in the home for days or weeks after closing while paying you rent. This arrangement can be win-win in the right circumstances.

Clearly specify what stays with the home and what the seller takes. In Wisconsin, fixtures (items permanently attached like light fixtures, built-in appliances, and window treatments) typically convey with the property unless specifically excluded.

Common Negotiation Items: Appliances, swing sets and playsets, storage sheds, riding lawn mowers, firewood, and mounted TVs. List specific items you want included to avoid misunderstandings later. If the seller’s listing excludes certain fixtures, decide whether those items are important enough to negotiate for or purchase separately.