Episode 5 of 10

Making an Offer

You've found a home you love. Here's how to structure an offer that protects your interests and positions you to win.

What Goes Into an Offer

The Components of Your Offer

An offer is more than just a price. In Texas, the standard residential contract has several negotiable terms — and how you balance them matters. Each component can strengthen or weaken your position depending on the market, the seller's situation, and your own priorities. Here's what I walk through with every buyer before we write a single line on the contract.

Sales Price

This is the number everyone focuses on first — and it matters — but it's only one of several levers. Your offer price should be grounded in comparable sales data and current market conditions, not just the asking price.

I'll prepare a Comparative Market Analysis (CMA) for every property you want to write on so you're making a data-informed decision, not guessing.

Earnest Money

Earnest money is a deposit held in escrow until closing. It signals to the seller that you're serious. In Texas, 1% of the sale price is typical, but it's negotiable. In a competitive situation, offering more earnest money can strengthen your offer without changing the price.

Your earnest money is credited toward your total cash due at closing — it's not an extra cost, it's an advance on what you'd pay anyway.

Option Period & Fee

The option period starts when the contract is executed and gives you the unrestricted right to terminate for any reason. You decide how long it lasts and how much you'll pay for it. A longer period gives you more time for inspections and due diligence, but it's riskier for the seller — so you'll pay more for that security.

This is one of the most strategic parts of the offer. A shorter option period can be the difference that wins a multiple-offer situation, but don't shorten it so much that you can't get your inspection done.

Closing Date

Typically 30 days after the contract is executed, but this can move forward or backward depending on the situation. Your lender's timeline and the seller's needs both factor in. Sometimes flexibility here is what a seller values most.

If the seller needs extra time to find their next home, accommodating that with a later close date — or offering a leaseback — can make your offer stand out.

Possession & Leaseback

In most transactions, the buyer takes possession at closing. But sometimes a seller needs to stay in the home after closing — often because they're buying another home simultaneously. A temporary leaseback allows this and can be a powerful negotiating tool.

Offering a seller leaseback costs you very little but can be highly valuable to the seller. It's one of the easiest ways to make your offer more attractive.

Who Pays for What

Title policy, survey, home warranty, closing costs — these are all negotiable. In some markets, the seller traditionally covers certain costs. In others, buyers take on more. Understanding which costs to ask for and which to absorb is part of the strategy.

I'll break down the estimated costs for you before we write the offer so there are no surprises. See the cost estimator below for title policy pricing.

Negotiable Transaction Costs

Earnest Money: ~1% of sales price

Option Fee: $200–$500+ (varies by price point)

Title Policy: Promulgated rate based on sale price

Survey: ~$400–$600

Home Warranty: $500–$800 annually

Agent Commissions: Negotiable, discussed upfront

Every one of these is negotiable between buyer and seller. Part of the offer strategy is deciding which costs to ask the seller to cover and which to absorb. I'll walk you through the tradeoffs before we write your offer.

Title Policy Cost Estimator

Texas title insurance rates are set by the Texas Department of Insurance — every title company charges the same rate. Use the slider to see the basic premium for an owner's title policy at the March 2026 promulgated rates.

Home Price

$250,000 $2,500,000

$550,000

Estimated Basic Premium: $3,003

Based on Texas Department of Insurance promulgated rates effective March 1, 2026. Actual premium may vary with endorsements, prior policy credits, and additional rate rules. This is the basic premium for an owner's title policy only.

Glossary

Key Terms

Earnest Money: A deposit held in escrow until closing that demonstrates the buyer's good-faith intent to purchase. Typically 1% of the sale price in Texas. Credited toward the buyer's total cash due at closing.

Option Period: A negotiated window (typically 7–10 days) after contract execution during which the buyer has the unrestricted right to terminate the contract for any reason. The buyer pays an option fee for this right.

Option Fee: A payment made to the seller in exchange for the termination option. The fee is credited to the sales price at closing. If the buyer terminates, the seller keeps the option fee.

Escrow: A neutral third party (typically a title company in Texas) that holds funds and documents during the transaction, from the initial earnest money deposit through final funding and closing.

Title Policy: Insurance that protects the buyer and lender against losses from disputes over property ownership. In Texas, rates are promulgated by the Texas Department of Insurance — every title company charges the same rate.

Survey: A professional measurement and mapping of the property's boundaries, improvements, and easements. Required by most lenders and used to confirm there are no encroachments or boundary disputes.

Closing Costs: All expenses beyond the purchase price incurred during the transaction — including loan fees, escrow fees, title policy, survey, prepaid insurance, and tax escrow. Typically 2–4% of the purchase price.

Closing Disclosure: A standardized document from your lender that itemizes all costs, credits, and payments for both buyer and seller. You'll receive this at least three business days before closing.

Leaseback: An arrangement where the seller stays in the home after closing for a negotiated period (typically days to weeks). Formalized through a Seller's Temporary Residential Lease addendum to the contract.

Home Warranty: A service contract that covers repair or replacement of certain home systems and appliances (plumbing, HVAC, electrical, etc.) for a set period, typically one year after closing.

Reference Documents

Common Contract Forms

When you make an offer on a home in Texas, we use standardized forms promulgated by the Texas Real Estate Commission (TREC). I'll walk you through every page before you sign anything — but it helps to know what documents are involved. Below are the forms most commonly used in a residential resale transaction.

One to Four Family Residential Contract (Resale)
The primary contract — covers the sales price, earnest money, option period, financing, closing date, possession, and all core terms of the transaction. TREC Form 20-18.
Third Party Financing Addendum
Required when the buyer is obtaining a mortgage. Specifies loan type, amount, interest rate, and origination charges. Protects the buyer if financing falls through.
Addendum Concerning Right to Terminate Due to Lender's Appraisal
Gives the buyer the right to terminate if the property appraises below the sales price. Separate from the standard appraisal provisions in the main contract.
HOA Addendum
Used when the property is in a homeowners association. Provides for review of HOA documents and gives the buyer the right to terminate based on HOA fees, rules, or financial condition.
Seller's Temporary Residential Lease
Used when the seller needs to remain in the home after closing. Specifies the lease period, daily rate, deposit, and move-out terms.

Additional Resources