What does "First offer" mean in real estate?

First offer in real estate is the initial purchase proposal a buyer submits when a property is listed. It’s the first formal bid that lays out price, terms and conditions, and often sets the tone for negotiations and the subsequent sales process.

How the first offer works

When a property hits the market, interested buyers can submit offers. A typical first offer includes:

Proposed purchase price
Financing and other contingencies (inspection, appraisal, sale of buyer’s current home)
Desired closing date
Earnest money deposit amount

After receiving a first offer, the seller can accept it, reject it, or respond with a counteroffer. The buyer may then accept the counter, revise their offer, or withdraw.

Why the first offer matters

Signals serious interest: A prompt, well-structured first offer usually comes from motivated buyers ready to act.
Can speed up the sale: Accepting a strong first offer can shorten time on market and reduce carrying costs.
Helps avoid lowballing: Early strong offers can prevent multiple price reductions or weaker bids later.
Sets negotiation baseline: The first offer often anchors future offers and counteroffers.

Real-world examples

Example 1 — Competitive market: A house listed at $400,000 receives a first offer of $410,000 within 24 hours with minimal contingencies and a large earnest deposit. The seller accepts and closes quickly.

Example 2 — Buyer’s market: A home listed at $350,000 gets a first offer of $320,000. The seller counters at $340,000; after negotiation they settle at $335,000 — the first offer initiated the process but didn’t close it.

Example 3 — Contractual right: In commercial leases a tenant may hold a right of first offer (ROFO). If the landlord decides to sell, the tenant gets the first chance to make an offer before the property goes to the open market.

Should sellers accept the first offer?

There’s no one-size-fits-all answer. Consider:

Market conditions: In a seller’s market, the first offer may be the best you’ll get.
Offer quality: Strong financing, larger earnest money, and fewer contingencies make a first offer more attractive.
Exposure goals: If you want broad market visibility, waiting for additional offers can be worthwhile.
Timeline needs: If you must close quickly, a solid first offer could be the right choice.

Key takeaways

The first offer is the initial bid that can shape the sale’s trajectory.
In hot markets, first offers are often competitive and may be accepted quickly.
In slower markets, the first offer usually serves as a negotiation starting point.
The related concept of a right of first offer gives a specified party the first chance to buy before wider marketing.

Conclusion

Understanding what a first offer means in real estate helps buyers and sellers make smarter choices. Whether you’re submitting the first offer to secure a property or deciding whether to accept one as a seller, weigh market context, offer strength, and your timeline before acting.