Jan 17, 2027 · By Oanh Nguyen · Broker & Loan Officer · Buying
When you find a home you love in the Bay Area, it's easy to feel pressure to do whatever it takes to win. Bid higher. Waive everything. Close faster.
Sometimes a strong offer is the right move. But winning a home at a price or on terms you can't comfortably afford isn't really winning.
The goal is to make an offer that's competitive and responsible: strong enough to get the seller's attention, with a price and terms you've decided on ahead of time.
In this post, I'll walk through how to use comparable sales, set a budget ceiling, strengthen your terms, think carefully about contingencies, choose a deposit and plan when to walk away.
This is general education, not legal advice, and not a loan offer. Your purchase contract controls your rights. Have your agent explain every term, and talk with a real estate attorney for legal questions.
How Competitive Is the Market?
Competition varies by city, price range and property type. For example, Redfin reported that in September 2026, about 46.4% of homes in San José and 46.6% in Fremont sold above list price, while the share was 24.3% in Pleasanton (all home types; Redfin city pages, accessed October 26, 2026).
These numbers will change, and they don't describe any one home. They're a reminder to look at current data for the specific area and home type you're shopping. I review recent sales and active competition with my buyers before every offer.
Step 1: Study the Comparable Sales
Your offer should start with evidence, not emotion.
Look at:
- Recent sales of similar homes nearby: size, bedrooms, bathrooms, lot, condition and location.
- How those homes sold compared with their list price.
- Days on market for similar homes.
- Pending sales, which show where the market is now.
- Active competition: how many similar homes buyers can choose from.
Remember: list price is a marketing decision. Some homes are priced to attract multiple offers. Others are priced high. Comparable sales tell you more than the list price does.
Step 2: Set Your Budget Ceiling Before You Write
Decide your maximum price before you're in the moment.
Base it on:
- Your pre-approval and what your lender says you qualify for. My post on pre-approval vs. pre-qualification explains what to ask.
- Your comfortable monthly payment, not just your maximum approval. My post on how much house you can afford walks through the full cost of ownership.
- Your cash: down payment, closing costs, reserves and money for moving and repairs.
- The appraisal risk: if you offer above what the home appraises for, you may need extra cash. I'll cover appraisal gaps in an upcoming post.
Write the number down. Share it with your agent. It's much easier to stick to a ceiling you set calmly than one you set during a bidding war.
Step 3: Strengthen Your Terms, Not Just Your Price
Price matters, but sellers look at the whole offer. My post on how sellers review offers shows what they compare.
Terms that can help:
- A strong, recent pre-approval with a responsive lender.
- A larger down payment, if it fits your plan.
- A realistic closing date that fits the seller's needs.
- A rent-back, if the seller needs time to move.
- Fewer requests, like no seller credits.
- Pre-offer inspections, so you know the home's condition before you write.
- Clear, clean paperwork with no missing pages.
Ask your agent what the seller cares about most. A seller who needs time to move may value a rent-back more than a small price increase.
Step 4: Think Carefully About Contingencies
Contingencies protect you. They let you cancel under certain conditions, like an inspection problem, a low appraisal or a loan denial, within set time frames.
In competitive markets, buyers sometimes shorten or remove contingencies to make their offer stronger. That can help win the home, but it also shifts risk to you.
Before shortening or removing a contingency, ask:
- Inspection: Have I inspected before writing? Do I understand the home's condition?
- Appraisal: Do I have extra cash to cover a gap if the appraisal is low?
- Loan: How confident is my lender? What could still cause a problem?
Never remove a contingency without understanding what you'd lose. Your deposit may be at risk if you can't close. I'll explain each contingency in my next post. Talk with your agent and, if needed, a real estate attorney.
Step 5: Choose Your Deposit
Your earnest money deposit shows commitment. It's held in escrow and usually applied to your purchase at closing.
Consider:
- Amount: a larger deposit may strengthen your offer.
- Timing: when it's due.
- Risk: your deposit may be at risk if you cancel outside your contingency rights. Your contract explains how this works, including any liquidated damages provisions.
Make sure the deposit comes from documented funds, since your lender will want to see where it came from.
Step 6: Plan Your Walk-Away Point
A walk-away plan protects you from decisions you'll regret.
Before writing, decide:
- Your maximum price.
- The terms you won't give up, like an inspection contingency or a minimum closing time.
- How much appraisal gap you could cover, if any.
- What you'll do if you don't win: keep looking, adjust your search or wait.
Remember: there will be other homes. Losing one is disappointing, but overpaying or taking on too much risk can affect your finances for years.
Step 7: Respond Well to Counters and Multiple Offers
If the seller counters or asks for "highest and best" offers:
- Revisit your ceiling, but don't throw it out.
- Ask what terms matter most to the seller.
- Respond on time.
- Keep your lender informed, especially if the price changes.
My post on how multiple offers work explains the process.
Questions to Ask the Listing Agent Before You Write
Your agent can often learn useful information by calling the listing agent. Common questions include:
- Are you expecting multiple offers, and is there an offer deadline?
- Are inspection reports and disclosures available now?
- What closing timeline does the seller prefer?
- Does the seller need a rent-back?
- Are there any terms the seller cares about most?
- Will the seller review offers as they come in, or all at once?
The answers help you write terms that matter to this seller, instead of guessing.
Price vs. Terms: A Simple Comparison
Sometimes a slightly lower price with stronger terms beats a higher price with weaker terms. Here's how a seller might see two offers.
| Offer A | Offer B | |
|---|---|---|
| Price | Higher | Slightly lower |
| Inspection | Contingency with full period | Pre-inspected, shorter period |
| Appraisal | Contingency | Contingency, with some gap coverage the buyer can afford |
| Financing | Pre-qualified | Fully pre-approved, lender has called listing agent |
| Closing | Standard | Matches seller's preferred date |
| Rent-back | None | Short rent-back offered |
Neither offer is automatically better. But this shows why sellers look beyond the headline number, and why buyers can compete on terms without exceeding their budget.
Keep Your Lender in the Loop
Before every offer, check in with your lender:
- Confirm your pre-approval still fits the offer price.
- Ask for an offer-specific letter if helpful.
- Ask how a higher price would change your payment and cash to close.
- Make sure the lender is available to answer the listing agent's call.
Small details like a responsive lender can tip a close decision in your favor.
A Note on Fair Housing and Buyer Letters
Some buyers write personal letters to sellers. Letters can raise fair housing concerns because they may reveal personal characteristics. Many agents, including me, recommend focusing on the offer's price and terms instead. HUD and the California Civil Rights Department publish fair housing guidance.
Offer Planning Worksheet
| Item | My plan |
|---|---|
| Comparable sales range | $ to $ |
| My budget ceiling | $ |
| Comfortable monthly payment | $ |
| Cash available (down payment, closing, reserves) | $ |
| Appraisal gap I could cover | $ |
| Deposit amount | $ |
| Inspection contingency (days, or pre-inspected) | |
| Appraisal contingency (days) | |
| Loan contingency (days) | |
| Closing date | |
| Rent-back offered? | |
| Walk-away point |
Common Mistakes
- Using list price as the guide instead of comparable sales.
- Setting your ceiling in the moment.
- Removing contingencies without understanding the risk.
- Forgetting appraisal risk.
- Draining reserves to win.
- Focusing only on price and ignoring terms.
Key Takeaways
- Start with comparable sales, not list price.
- Set your budget ceiling before you write.
- Strengthen terms as well as price.
- Understand the risk before changing contingencies.
- Have a walk-away plan.
A Hypothetical Example
This example is made up to show the process. It is not based on any real home, buyer or seller.
A buyer finds a townhome listed below recent comparable sales. They expect multiple offers. Before writing, they review comps, confirm their pre-approval and set a ceiling based on their comfortable payment and cash reserves.
They inspect before writing, so they're comfortable shortening the inspection period. They keep their loan and appraisal contingencies but offer the seller a short rent-back. The seller receives five offers. Another buyer offers more than the first buyer's ceiling. The first buyer declines to go higher and keeps looking. Two weeks later, they win a similar townhome within budget.
Frequently Asked Questions
How much over asking should I offer?
It depends on comparable sales, competition and your budget. List price alone isn't a reliable guide.
Should I waive contingencies to win?
Only after understanding the risks, and with your agent's and possibly an attorney's guidance.
Does a bigger deposit help?
It can show commitment, but understand when it could be at risk.
What if the home doesn't appraise at my offer price?
You may need to cover the difference in cash or renegotiate, depending on your contract.
Do buyer letters help?
Many agents advise against them because of fair housing concerns. Focus on price and terms.
How do I set my maximum price?
Use your pre-approval, comfortable monthly payment, cash and appraisal risk.
Should I inspect before making an offer?
In competitive situations, pre-offer inspections can help you understand the home and write a stronger offer.
What if I lose several bidding wars?
Revisit your search area, home type or timing, but keep your budget ceiling.
Should I offer all cash if I can?
Cash can be attractive to sellers, but think about your reserves and liquidity. Talk with your financial advisor and lender about the trade-offs.
How fast should I respond to a counteroffer?
Before the deadline in the counter. Talk with your agent and lender first so your response fits your budget.
How I Can Help
As a broker and loan officer, I help buyers study comps, set a budget ceiling, structure competitive terms and understand the risks of each contingency decision, while keeping their financing on track. Loan approval always depends on lender review and approval.
The Bottom Line
A competitive offer doesn't have to mean ignoring your budget. Study comps, set your ceiling in advance, strengthen your terms, think carefully about contingencies, choose a sensible deposit and know your walk-away point.
Getting ready to write an offer? Let's plan your strategy together.
Sources
- Redfin, San Jose housing market (accessed October 26, 2026): https://www.redfin.com/city/17420/CA/San-Jose/housing-market
- Redfin, Fremont housing market (accessed October 26, 2026): https://www.redfin.com/city/6671/CA/Fremont/housing-market
- Redfin, Pleasanton housing market (accessed October 26, 2026): https://www.redfin.com/city/14986/CA/Pleasanton/housing-market
- U.S. Department of Housing and Urban Development, Fair Housing Act overview: https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview
- California Civil Rights Department, Housing discrimination: https://calcivilrights.ca.gov/housing/
- Consumer Financial Protection Bureau, Buying a house: https://www.consumerfinance.gov/owning-a-home/process/
Plan your offer strategy with me. Call or text me at 408-780-1188, or email onrealtygroup@gmail.com.
Oanh Nguyen · Broker & Loan Officer · On Realty Group, brokered by LPT Realty · BRE #02133991 · NMLS 2020335
Equal Housing Opportunity.
Loan disclosure: Oanh Nguyen, Broker | Loan Officer, On Realty Group, brokered by LPT Realty, BRE #02133991, NMLS #2020335. This post is general education, not a loan offer, rate quote or commitment to lend. Loan programs, guidelines and eligibility change and are subject to lender review and approval.
Disclaimer: This post is general information only, not an appraisal or legal, tax or financial advice; data comes from the public sources linked above, is believed reliable but not guaranteed, and can change at any time.