Key takeaways
13 min read
- Price your offer from recent comparable sales, not the list price alone.
- Read the market first. Seller's and buyer's markets call for different strategies.
- Set a walk-away number before you bid, and share it with your agent.
- Use levers beyond price: escalation clauses, earnest money, appraisal gap coverage, and flexible timing.
In this chapter
1Know what the home is worth
The list price is the seller's opening number, not the home's value.
Some homes are priced low to draw multiple offers, and others are priced high to leave room to negotiate. Comparable sales, or comps, tell you what buyers actually paid. Every TurboHome client gets a valuation report with nearby sales, so you can see what similar homes sold for and how features like an extra bathroom or a garage are valued locally.
Doing a rough check on your own
- 1
Stay close
Look at homes sold within about half a mile to a mile.
- 2
Stay recent
Stick to sales from the last three months when you can.
- 3
Match the basics
Beds, baths, square footage, and lot size, as closely as possible.
- 4
Adjust for condition
A remodeled kitchen and a dated one aren't comparable.
Or you can simply request a valuation report from your TurboHome team!
Read the market you're buying in
Your strategy depends on who has the leverage. Check days on market, price per square foot, and the sale-to-list price ratio for your area in the TurboHome app.
Who has the edge?
Seller's market
Under about 4 months of supply
- Homes sell fast, frequently over asking
- Clean, strong offers win
Balanced
About 4 to 6 months
- Neither side has a clear edge
Buyer's market
Over about 6 months of supply
- Homes sit longer; price cuts are common
- Room to ask for repairs or credits
Months of supply is how long current listings would take to sell at today's pace.
Markets can differ block by block and price point by price point. A starter condo and a large single-family home in the same city can behave very differently.
3Set your walk-away number
After losing a home or two, it's tempting to stretch. Decide your ceiling before you bid, based on the monthly payment you're comfortable with, not the most a lender will approve.
Drag to see what stretching really costs
+$158
more every month
$56,886
paid back over 30 years
Principal and interest at an illustrative 6.5% 30-year fixed rate. Property taxes and insurance also rise with a higher price.
Winning a bidding war at a price you can't sustain isn't a win.
Write your number down and share it with your agent. A good agent will hold you to it, and because TurboHome charges a flat fee, we don't make more when you pay more.
4Know what goes into an offer
An offer is a full contract proposal with a price and many other terms. Your agent will draft it, but you should understand each term, because sellers weigh all of them.
A sample offer, marked up
Purchase price
$780,000
What you'll pay for the home
Earnest money
$23,400 (3%)
Your good-faith deposit into escrow, usually 1% to 3%
Financing
Conventional loan, 20% down
Loan type, down payment, or a cash purchase
Contingencies
Inspection, appraisal, and loan
Conditions that let you back out, and how long each lasts
Closing date
30 days after acceptance
When the sale finalizes and funds change hands
Inclusions
Refrigerator, washer, and dryer
Appliances, fixtures, or furniture that stay with the home
Possession
At close of escrow
When you get the keys, and whether the seller rents back
Sample terms for illustration.
Offers usually include an expiration time. The seller can accept, reject, counter, or let it expire.
Make your first offer your best one
In a competitive market, you may only get one shot. Price matters most, but these levers can make your offer the easiest yes.
Escalation clause
- How it helps
- Raises your bid in set steps over competing offers, up to a cap
- The risk
- Reveals your ceiling if the cap is reached
Larger earnest money
- How it helps
- Signals commitment; up to 10% in very competitive markets
- The risk
- More cash at stake if you back out improperly
Appraisal gap coverage
- How it helps
- You agree to cover some or all of a low appraisal
- The risk
- You need extra cash at closing
Flexible closing date
- How it helps
- Fits the seller's move
- The risk
- May not match your lease or loan timing
Shorter contingencies
- How it helps
- Less waiting and uncertainty for the seller
- The risk
- Less time to inspect and arrange financing
How an escalation clause plays out
$800,000
Your starting offer
$820,000
Best competing offer
$825,000
Your final price
$850,000
Your cap
- Starting offer
- $800,000
- Beats any competing offer by
- $5,000
- Cap
- $850,000
You win the home at $825,000
Build your offer with an agent
Request an offer in the app and your agent will walk you through each lever before you sign.
6Weigh every contingency carefully
Contingencies let you back out or renegotiate if something goes wrong. Waiving them can strengthen an offer, but it shifts risk to you. Here's what each one protects.
Inspection
Protects you if
Inspections reveal problems you didn't expect
Middle ground: Shorten the window or inspect before you offer
Appraisal
Protects you if
The home appraises below your price
Middle ground: Offer partial appraisal gap coverage
Loan
Protects you if
Your financing falls through
Middle ground: Get fully underwritten before you offer
Sale of current home
Protects you if
Your current home doesn't sell in time
Middle ground: Sell first or use bridge financing
In California, standard purchase contracts set default contingency periods that your agent can shorten or extend.
7Know who usually pays for what
When you put an offer together, it helps to know which side typically covers each cost. Customs vary by state and county, and nearly everything can be negotiated.
Buyer
- Home inspection$300 to $500
- Appraisal, required by lender$300 to $600
- Loan and escrow feesOften 2% to 5% of the loan
- Lender's title policy
- Homeowner's insurance, first year often upfront
- Recording fees, set by the county
Seller
- Owner's title policy, often, depending on county
- Agreed repairs, if negotiated
Split or negotiable
- Property taxes, prorated to the closing date
- Home warranty, optional
Title policy costs vary by price and state. Your Loan Estimate and title company will give exact figures.
8What happens after you submit
Accepted
You'll sign, open escrow, and deposit earnest money. Head to chapter 5.
Countered
The seller changes price or terms. You can accept, counter back, or walk away.
Multiple counters
Some sellers counter several buyers at once and ask for best and final offers.
Rejected or outbid
It stings. Ask your agent for feedback, then move to the next home with sharper comps.
Found the one?
Request an offer in the app. Your agent will review comps, terms, and strategy with you before anything is sent.
Common questions
Should I offer over asking price?
It depends on your market. You can review the average percentage over or under asking price for that zip code in the TurboHome app.
Combined with a TurboHome valuation report (and guidance from your agent, of course!), you'll have everything you need to submit an informed and competitive offer.
How much earnest money should I put down?
Typically 1% to 3% of the price, and up to 10% in very competitive markets. It goes toward your down payment at closing.
Is it safe to waive the inspection contingency?
It adds real risk. Consider shortening the window or inspecting before you offer instead, and talk through every scenario with your agent.
What is an appraisal gap?
It's the difference between your offer price and a lower appraised value. Lenders lend based on the appraisal, so you'd need to cover the gap in cash or renegotiate.