What is a reasonable offer on a house?
Many factors go into making a reasonable offer on a house. Your real estate agent (called a buyer’s agent) can help you determine a fair offer based on some of the following:
- Overall housing market
- The home’s comps
- How long the home has been on the market
- Condition of the home
For example, if your agent believes the home is overpriced to begin with based on these factors, then a reasonable offer may be below the asking price. You will also need to recognize if you are in a buyer’s market or a seller’s market, since that will help you determine how flexible the home price is.
Purchase offer prices are typically negotiated after the seller receives your initial offer, so your agent may recommend a price that leaves room for those negotiations. For example, you may decide to offer 5% below the asking price so you and the seller can ultimately agree on a price in the middle.
How much below or above asking should you go?
How much to offer on a home depends on market conditions, property demand and your personal goals. Use the chart below as a quick guide to decide whether to bid below, at or above the asking price and when each strategy makes sense.
| Offer range | When to use it | Why it works (or doesn’t) |
|---|---|---|
| 5% to 10% below asking price | In a buyer’s market, when homes sit on the market for several weeks or need repairs | Signals interest while leaving room to negotiate; sellers may accept if they’re motivated to sell |
| At asking price | In a balanced market with fair pricing and moderate competition | Shows you’re serious without overpaying; works well if comps support the listing price |
| 1% to 5% above asking price | In a competitive or hot market with multiple offers | Strengthens your chances of winning the bid; may appeal to sellers prioritizing speed or certainty |
| 10% or more above asking price | When the home is highly desirable or likely to attract bidding wars | Can secure your offer quickly, but risk of overpaying increases — ensure the appraisal supports your bid |
What are comps?
“Comps,” short for comparable sales, are recently sold homes similar in size, location, condition and features to the one you’re interested in buying. Real estate agents and appraisers use comps to estimate a home’s fair market value and help buyers decide how much to offer.
Keep your preapproved loan limit in mind
In addition to offering a price that aligns with the value, you want to consider your preapproved loan amount (which is the maximum amount the lender will lend to you). If you are searching for homes near your price limit, you’ll want to keep in mind that the final sale price could be higher than the list price, which would put you over your preapproved loan amount.
You may want to consider homes in the middle of your price range so you have some wiggle room for negotiations if a bidding war occurs between many potential buyers.
When it makes sense to offer the asking price or less
You may decide to offer the asking price or less if the home hasn’t been listed for a long time and there aren’t many offers yet. If the seller is motivated to sell quickly, offering the asking price could up the chances of your offer being accepted.
However, it might also make sense to see if the seller will accept less than the asking price in specific cases.
It’s a vacant house
If a home is vacant, there’s an assumption that the seller has already moved and is currently paying two mortgages (one for the listed home and another for the home they currently live in). In this case, the seller may be more motivated to wrap up the sale quickly with an offer below the asking price.
It’s a fixer-upper
If the home needs significant repairs, it may not have as much buyer interest as a new build or recently renovated home. Also, if the home inspection reveals more repairs than you anticipate, you may be able to negotiate a price reduction with the seller.
It’s a property with low demand
If it’s a one-of-a-kind property, there may not be as much interest. For example, homes with many acres of land aren't as sought after as homes situated on just an acre. Many buyers don’t want to pay for and maintain that much land. Your agent may advise you to offer below the asking price in those cases.
It’s overpriced based on available comps
Offers below the asking price may be appropriate, given the market and the available comps. For instance, if your agent advises that the home is a bit overpriced based on the comps, you may decide to offer a price that’s more in line with what similar homes are selling for in the area.
Risks and considerations of lowball offers
A lowball offer is typically 10% or more below the asking price and can be risky if not backed by solid market data. Sellers may view it as disrespectful or assume you’re not a serious buyer, which could shut down negotiations entirely.
It may also cause you to lose out on the property if other offers come in. To avoid missteps, consult your real estate agent. They can help you gauge fair value, justify your offer with comps and negotiate effectively without alienating the seller.
How to calculate your maximum offer
When putting an offer on a house, always leave a little room in your budget. Offering your absolute max can strain finances and limit flexibility during negotiations. Here’s how to calculate how much you can afford to offer:
- Review your budget: Start with your preapproval amount, but focus on what monthly payment you can comfortably afford.
Factor in ownership costs: Include property taxes, insurance, HOA fees and maintenance. - Account for existing debt: Lenders look at your debt-to-income ratio, so keep total payments under control.
- Calculate your maximum offer: Subtract expected closing costs and a cushion for repairs or furnishings.
When it makes sense to offer more
There are times when offering more than the asking price can be a strategic move to secure your dream home. It’s not uncommon for homes to sell above asking price during a seller’s market, which is when the supply of homes listed for sale is lower than the number of homes demanded by buyers.
You’re competing with another buyer
You may decide to offer more than the asking price if the seller is expected to receive multiple offers and has a short deadline to choose one. In addition to offering more than the asking price, you may also include more due diligence money, which is nonrefundable, to show the seller you're a serious buyer.
It’s a seller’s market
When you are trying to buy in a seller’s market, you need to realize that the seller has the power. They are likely going to list their home at a competitive price with the goal to start a bidding war.
There’s investment potential
If you believe the property has significant investment potential and you’re willing to pay a premium to secure it, offering over asking could make sense in the long run. For example, the property could be in a highly sought-after neighborhood or may have unique features — both of which could bring about a strong return on investment should you sell the property later on.
» MORE: 5 ways to determine house value
Offer strategies and tactics for different buyers
Your buyer profile can significantly influence how strong your offer appears and how you negotiate. Tailoring your strategy based on whether you’re a first-time buyer, a cash buyer or an investor can improve your chances of success.
First-time buyers
First-time buyers should focus on affordability and credibility:
- Get preapproved for a mortgage to show sellers you’re serious.
- Determine a realistic budget that includes closing costs and repairs.
- Offer a reasonable earnest money deposit to demonstrate commitment.
- Request minor concessions, like a home warranty or repair credits, to make your offer more appealing without inflating the price.
Cash buyers
Cash buyers have a clear advantage because their offers are faster and more certain. Highlight your ability to close quickly, reduce contingencies and provide a large earnest money deposit to stand out. Sellers often favor cash offers, even if slightly lower than financed offers, due to the reduced risk of financing falling through.
Investors
Investors often succeed by making as-is offers and limiting contingencies, such as inspection or appraisal conditions, to streamline the deal. Thorough market research ensures the property meets return-on-investment goals. Highlighting your ability to close quickly and handle repairs independently can make your offer more attractive in competitive investment markets.
Ways to strengthen your offer beyond price
You don’t always need to outbid competitors to win a home. Non-price tactics can make your offer more attractive to sellers, too.
Prioritize financial and contractual terms over emotional appeals, since sellers often value certainty and speed more than sentiment.
- Higher earnest money deposit: Offering a larger deposit signals commitment and seriousness, reassuring the seller that you’re financially invested in the purchase.
- Flexible closing timeline: Accommodating the seller’s preferred closing date, whether faster or slower, can make your offer more appealing without increasing the price.
- Contingency waivers: Limiting or waiving certain contingencies, like inspection or financing, can reduce risk for the seller and speed up the transaction. Always review these carefully with your agent.
- Personal letter: While less impactful than financial terms, a brief letter explaining why you love the home can create an emotional connection with the seller.
FAQ
Can I offer 20% below the asking price?
You can, but it depends on the local market and the home’s condition. In a buyer’s market, where homes sit unsold for weeks or need repairs, offering 10% to 20% below asking might be reasonable. In a competitive seller’s market, though, a low offer could be rejected or ignored. Research comparable sales and work with your real estate agent to make a realistic offer.
Is 90% of the asking price a good offer?
Offering 90% of the asking price can be reasonable in some situations, but it largely depends on the local market and the property’s condition. In a slow or buyer’s market, where homes take longer to sell, a 10% discount might be a smart starting point for negotiation.
However, in a competitive seller’s market, offering only 90% could be seen as too low and might cause the seller to reject your offer outright. Your real estate agent can help assess recent comparable sales (“comps”) to decide whether a 90% offer makes sense for that specific home.
Can I outbid an accepted offer?
Once a seller has accepted an offer, they’re typically under contract and can’t entertain new bids unless the deal falls through. However, you can submit a backup offer, which gives you the chance to buy the home if the current buyer backs out. Your agent can help you draft a backup offer that keeps you in line without breaching any legal terms.
Can a seller cancel after accepting an offer?
In most cases, a seller can’t cancel after accepting an offer without facing penalties. Once both parties sign a purchase agreement, it becomes legally binding. A seller may only back out under certain contingencies; for example, if the buyer fails to meet financing terms or deadlines. Otherwise, canceling could lead to legal disputes or financial loss.
What is an escalation clause?
An escalation clause is a contract add-on that automatically increases your offer by a set amount if a competing bid comes in, up to a maximum limit. For example, if a home is listed at $400,000 and you offer $405,000 with a $5,000 escalation clause up to $420,000, your offer will automatically rise above any competing bid within that range.
Escalation clauses are most useful in competitive or multiple-offer markets, allowing you to stay in the running without overpaying upfront.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Consumer Financial Protection Bureau, “Buying a house: Tools and resources for homebuyers.” Accessed Nov. 4, 2025.
- Realtor.com, “How Much To Offer on a House: Should You Go Below or Above the Asking Price?” Accessed Nov. 4, 2025.
- Citizens Bank, “9 things to do before making an offer on a house.” Accessed Nov. 4, 2025.
