How to Write a Clean Offer

In competitive real estate markets, a good listing agent will always prefer Clean Offers a to work with because they are the most favorable for the seller, and they are not always the highest offers! A clean offer refers to a Purchase Agreement that requires little from the seller, and often has shortened or removed contingencies. Clean offers can be used to greatly leverage your offer past others buyers that are willing to pay more, but may not be using other areas of the purchase agreement to their full advantage.

A lot goes into getting an offer accepted in a hot market. Here is how we write clean offers!


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Strong Initial Deposit

Your initial deposit, or earnest money deposit (EMD), is a portion of your down payment that you submit to escrow as collateral for the seller. The deposit amount varies depending on the purchase price, but a strong EMD is between 2% – 3% of the purchase price of the home.

An offer with a strong EMD shows the seller that they are working with a serious and motivated buyer. Another way to show motivation is by shortening the standard contingency timeframes.

Shortened or Removed Contingencies

The standard purchase agreement has several contingencies. The number of contingencies can vary depending on the property type and purchase agreement. However, there are three main contingencies and time frames that buyers need to pay attention to during escrow:

  • Physical Inspection Contingency: 17 days
  • Appraisal Contingency: 17 days
  • Loan Contingency: 21 days

The standard timeframes for each contingency can be seen above. With these timeframes, a seller could be in escrow for up to 17 days with a buyer before they are contractually required to either remove their inspection contingency or cancel escrow. Shortened contingencies timeframes can vary greatly, but they often look like the example below:

  • Physical Inspection Contingency: 10 days
  • Appraisal Contingency: 14 days
  • Loan Contingency: 17 days

The most manageable contingency to shorten is the physical inspection contingency, since we can schedule the inspections as soon as they open escrow. With the shortened timeframes above, the seller saves a lot of time, but we would only have 10 days to either commit or quit. These are the small differences that can make a huge impact when competing with other offers.

Removing contingencies on your offer is something we only suggest under specific situations. Removing contingencies from your offer will definitely make you more favorable to work with, but they also limit your ability to exit escrow with your deposit in hand.

Shortened Escrow length

You often hear the term “Cash is King”, and that statement resonates true in real estate. Cash offers are very attractive to sellers because you can close an escrow in DAYS rather than weeks. Paying cash means there is no lender involved, so there is no appraisal and no loan approval process, just a physical inspection of the property. However, just because you have a loan doesn’t mean you can’t close escrow sooner than 30 days.

Talking with your lender can provide some options if you are having trouble competing with cash offers. Some lenders allow the borrower to go through underwriting before locating a property. Doing this upfront will save you precious time in escrow and could potentially reduce your escrow length from 30 to 21 days or less!

Include a Personal Letter

Adding a personal letter to your offer is the final component to complete your competitive offer. Each seller will have their own agenda on what they are looking for in a buyer; a growing family, a buyer who will love the property for what it is, “highest and best” price, etc., and we rarely know (unless your agent asks, of course).

We highly encourage all our buyers to include a personal letter with their offer because it is likely your only opportunity to make a personal connection with the seller. You could have something in common with the seller that instantly makes you stand out – a common interest, field of work, etc. It costs nothing but time to include a personal letter with your offer, so be sure not to skip out on it!


Relate Topics: How to write an offer on a house

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