How to Write an Offer Letter When You’re Buying a House in Texas

Craft a Concise, Compelling Offer Letter That Stands Out without Leaving Anything Out

You’ve just toured an amazing home in Houston, Austin, Dallas, San Antonio, or elsewhere in Texas —now, it’s time to put together an offer letter. As you do this, your offer letter should be one part formulaic, covering some standard elements, while also being totally custom to fit the property and circumstances at hand.

Get it right, and you can easily edge out other buyers and offers in even the most competitive bidding wars and markets.

Get it wrong, and the property and deal of your dreams could slip through your fingers.

To help you figure it all out with minimal hassle, this 3-minute guide to offer letters shares insightful answers and info for homebuyers, explaining:

• What Is an Offer Letter?
• What to Include in a Buyer’s Offer Letter
• How Soon to Send an Offer Letter After Viewing a House
• How Long Does a Seller Have to Consider an Offer Letter?
• What Happens After I Send the Seller My Offer Letter?
• What Else Do I Need to Know About Offer Letters?

If you have more questions or need help navigating offer letters, negotiations, or the closing process as a homebuyer or seller in Texas, contact an experienced Realtor® at New Home Gurus.

What Is an Offer Letter?

An offer letter is a formal, written communication that explains an individual’s interest in buying a property, presenting a detailed proposal for the terms of purchase. In particular, buyer offer letters typically cover several matters, including (and not necessarily limited to):

1. The Purchase Price: This is the total amount the buyer agrees to pay for the property. The purchase price in the offer letter may be under, at, or over the seller’s asking price.
   
2. Earnest Money: This is the deposit a buyer agrees to pay to proceed with negotiations and express their serious intent to buy a house. Earnest money can be put toward the purchase price or the closing costs, with the buyer specifying how they want that to work in the offer letter.
   
3. Financing: The buyer can state whether they intend to pay in cash or obtain financing. If financing is needed, buyers can specify whether they have secured a mortgage preapproval from a lender. Doing so can edge out other buyers and offers that aren’t coming to the table with a preapproval.
   
4. Contingencies: These contingencies can offer a “safety net” for buyers, hinging the agreement to purchase the house on the findings of the home inspection and/or appraisal. In some cases, buyers may also want to include a financing contingency, stating that the agreement to buy the house is contingent on the buyers obtaining financing by some date.
   
5. Closing: Buyers can explain what type of timeline they expect, need, or are willing to work around when it’s time to close.
   
6. Expiration Date: A good offer letter won’t be “valid” forever. Instead of being open-ended, good offer letters will have an expiration date, meaning a date after which the offer is no longer available. Including an expiration date in an offer can prompt a timely response while also giving buyers the chance to counter or move on to other options if their first offer is rejected.

Offer letters won’t look the same from buyer to buyer or from transaction to transaction. They also won’t come up with every property tour, and some may not cover all of the bases they should.  

Still, as long as buyers and sellers understand what offer letters are, they can better position themselves to make an informed choice that protects their interests going forward.

What to Include in a Buyer’s Offer Letter

When you’re serious about buying a house in Texas, here are the key points to include in your offer letter to make sure that you’re addressing the critical issues involved in the transaction. Each of the following offer components below is discussed in the general order in which it should appear in the letter, giving you a rough outline for mapping out any offer letter.

1. A Brief, Personalized Introduction

Date the letter and open with a greeting that, ideally, addresses the seller by name. Then, start the offer letter with:

• A concise intro that tells the seller who you are
• Some context regarding why you want the house or when you viewed it
• A short compliment about the property and/or some brief personal details explaining why you like and want the property.

Kicking off an offer letter in this way can give the seller(s) some helpful background for what’s next.

Example:

Jan. 22, 2024

Dear Mr. and Mrs. Seller,

Thank you for the tour of your home this past weekend. My wife and I, Mrs. Jane Doe and Mr. John Doe, see so much opportunity in your charming home for our growing family.

2. The Offer

Write the dollar amount you propose as the purchase price for the house, including the physical address and:

• Earnest money you intend to put down: State the amount of the earnest money, when this will be paid, and how those funds will be applied to the overall purchase if it goes through. Smart buyers usually also include terms for when the earnest money gets refunded, like if the seller backs out of the deal or if any contingencies disrupt the sale.
  
• Any contingencies: If the purchase depends on the home inspection not finding any serious issues or the appraisal coming in at a certain value (like the agreed-upon purchase price), that needs to be specified in the offer letter. On the other hand, if the buyer is going to waive any contingencies, it’s prudent to specify that here too, so the seller is aware.

This is essentially the “meat” of the offer, so buyers need to be careful about the price they put forth here. Specifically, if buyers are going to offer anything under the asking price, taking some care to not lowball the seller too much can be a savvy move.

Example:

We would like to offer $500,000 for your home located at 1234 Long St., Houston, Texas. As a show of good faith, we intend to pay $1,000 in earnest money within 48 hours of the seller accepting the offer. The buyer’s earnest money will be applied toward closing costs if the deal proceeds.

The buyer reserves the right to renegotiate the purchase price or back out of the deal, claiming a full refund of the earnest money, if the home inspection report reveals major problems with the property or if the appraisal values the home below the purchase price.

3. Financing Details

Next, a solid offer letter will usually share some details about buyers’ plans for financing. While buyers don’t need to detail every last aspect of their mortgage here, it is helpful for them to explain if they have a preapproval in place.

That can help sellers evaluate different buyers, particularly when they’re comparing offers from buyers who have preapprovals versus those who don’t.

Example:

The buyers have already obtained preapproval for a mortgage loan for the full amount of the purchase price.

4. Timeline & Closing

How soon do you need the deal to close? Or how much leeway do you have for the closing timeline?

Stating these details next can give sellers a clear idea of what you need and how you may be willing to work with them on closing terms (if needed).

In this part of an offer letter, it’s also important to explain who is covering closing costs. This may be subject to negotiation in some sales.

Example:

The buyers need to close by March 1, 2024, and they may be willing to work with the sellers on move-out timelines. Total closing costs will be split between the buyers and sellers at closing.

5. Conclusion

Wrap up the offer letter with some kind words and a clear statement of how long the offer will remain valid. Be sure to include your name and contact information in closing.

Example:

This offer will remain valid for 72 hours, expiring on Jan. 25, 2024.

We look forward to hearing back and, hopefully, coming to a favorable agreement for everyone.

Sincerely,

Remember, once you write an offer letter, read it over at least once before you send it to the seller or the seller’s agent. This can give you a chance to catch and correct any mistakes before the offer is out there.

How Soon to Send an Offer Letter After Viewing a House

If you really want to buy a house in Texas, you typically don’t want to wait too long to put an offer in on it. That said, it’s usually in home buyers’ best interests to put offers in:

• Promptly: If you make your offer soon after seeing a home, the quick turnaround can affirm your strong interest and possibly be viewed favorably by the sellers. If you have to compete with other buyers and offers, being first to bat could be all it takes it edge out the competition.
  
• Before any posted deadlines: If sellers have specified a deadline for offer submissions, make sure you comply with this request, getting your offer letter submitted before it’s too late.
  
• After some careful thought: Can you afford the house and get approved for a mortgage? Is the home priced right for you? And is this the best option for you right now? Don’t wait until after you submit an offer to answer these questions.

If you’re strongly considering putting in an offer but you’re not quite ready for whatever reason, staying in contact with the seller’s Realtor is generally a good idea.

How Long Does a Seller Have to Consider an Offer Letter?

Sellers will often respond to offer letters in a timely manner, replying to buyers within a few days and generally by any specified deadline. While sellers may reach out to ask for an extension in some cases, buyers tend to get answers fairly quickly.

If they don’t and it’s edging up on a week since an offer was submitted, touching base with the seller’s agent is usually a smart move.

What Happens After I Send the Seller My Offer Letter?

Once you’ve sent the offer letter to the seller or their agent, the next steps depend on whether the offer is accepted or not. Generally, however, here’s what can occur after a seller gets an offer letter from a buyer:

1. The seller reviews the offer letter and responds: After reading your proposal for the purchase of the house, the seller will typically reply, explaining whether they accept, reject, or are willing to counter your offer. 
   
2. The seller accepts the offer: In this ideal case, the transaction can move forward to the next steps, which are usually to proceed with the mortgage and schedule the home inspection and appraisal.
   
3. The seller rejects the offer: The seller may come back with a “no” to the offer if they have other more attractive offers on the table.
   
4. The seller counters: Sometimes, the seller may come back with fresh terms, upping the purchase price and/or altering the terms of the sale. In these cases, there can be some back and forth between buyers and sellers to work out the nitty-gritty and dial into a win-win agreement for all parties involved.

If buyers and sellers can agree on the offer and purchase, the official terms will be put into a contract that buyers and sellers sign as a formal acknowledgment that they agree to the sale.

This can be a highly sensitive stage of the home-buying process, especially when there’s more back and forth between the buyers and sellers. That’s when it can be invaluable to have the support of an experienced Realtor, who can share essential perspective and answers at each step.

What Else Do I Need to Know About Offer Letters?

There may be a lot more to know about offer letters when you’re buying or selling a house in Texas. To get the answers you need and more support going forward, turn to an experienced Realtor® at New Home Gurus.

We guide and advise home buyers and sellers through offers, contingencies, negotiations, inspections, appraisals, and so much more. Plus, we split our commission with our clients at closing.

Home sellers and buyers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.

How Much Cash Can You Get After Closing?

Call (281) 668-8124 or Contact Us to Find Out Now

We are standing by, ready to answer your questions and explain the details of our commission-sharing program.