How to Make an Offer | An Alhambra Realtor’s Guide

Buying a home in Southern California is an exciting yet competitive process. Whether you're looking in Los Angeles, Orange County, or San Diego, making a strong and strategic offer is essential to securing your dream home. This guide will walk you through the steps of making an offer on a house in Southern California.

Understanding the Market in Southern California

Before making an offer, it's crucial to understand the local real estate market. Southern California is known for its high demand and limited housing inventory, which often leads to multiple-offer situations. Research comparable home prices, market trends, and the average days on the market to gauge the competition.

Steps to Making an Offer on a House

1. Get Pre-Approved for a Mortgage

Before submitting an offer, ensure that you have a mortgage pre-approval. This shows sellers that you are a serious buyer and financially capable of closing the deal. The pre-approval letter is a requirement nowadays, as it shows the seller that you, the buyer, can actually get a loan. The steps and items needed for obtaining a pre-approval letter are generally as follows:

• Loan Application (usually can be completed online, via a Portal depending on which bank or lender you choose)

• Last 2 Pay Stubs

• 2022 & 2023 W2’s, possibly 2024 if you’ve filed your taxes

• 2023 Tax Returns (include all pages). Possibly 2024 if available.

• Last 2 Consecutive Month’s Bank Statements (to document source of down payment & reserves)

• Gov’t-issued ID (e.g. Driver’s License, Passport, Green Card, Visa or EAD Card if applicable)

Most lenders today can generate a preapproval letter as fast as the same day, or in 1-2 days. To see how much you might qualify for on a loan, use our Borrowing Capacity Calculator. But remember, this tool is just an estimate.

2. Work with an Experienced Real Estate Agent

Partnering with a knowledgeable local real estate agent can give you an advantage in negotiating and structuring your offer. They will help you analyze the market and craft a competitive bid. Here are some advantages a buyer’s agent provide to buyers, which generally outweigh any commissions:

1. Market Analysis & Pricing Strategy – A skilled agent will analyze comparable sales, market trends, and neighborhood conditions to help buyers make a competitive yet reasonable offer. This is arguably one of the most important aspects. Don’t get caught up in the “list” or “asking” price. In many markets, properties are “listed low” to attract more potential buyers. The actual market value of a home is supported by historical transactions. A good realtor will always help you get an idea for market value to make the best offer.

2. Property Search & Showings – They save buyers time by filtering through listings that match their needs and arranging private or open house showings. Yes, nowadays a lot of this can be self-guided. However, a good agent attends all showings and can point out defects, give advice on renovations, cost of those renovations and recommendations for expansions or modifications.

3. Negotiation Expertise – A strong buyer’s agent will negotiate the best price and terms, advocating for their client's interests throughout the process. Negotiation also includes terms beyond just price. During escrow, or the attorney review process, a good agent will leverage inspectors, roofers, contractors to reveal defects and help the buyer negotiate either a price reduction, or credits to offset costs.

4. Handling Paperwork & Contracts – They ensure all documents, disclosures, and contingencies are properly managed to protect the buyer legally and financially. Bad contracts can cost a lot of money and in the worst cases, make a buyer lose their deposit.

5. Connecting with Professionals – They have a network of trusted lenders, inspectors, and contractors to help with every stage of the home-buying process.

6. Guidance Through Escrow & Closing – A good agent will walk buyers through inspections, appraisals, and closing procedures to ensure a smooth transaction.

7. Problem-Solving & Risk Mitigation – If issues arise during the transaction (such as appraisal discrepancies or inspection problems), an experienced agent will find solutions to keep the deal on track.

3. Determine Your Offer Price

Your offer price should be based on recent comparable sales, the home's condition, and the level of competition in the area. In hot markets like Los Angeles or Orange County, you may need to offer above the asking price to stay competitive. Remember, the asking price can often be just the advertised price. The seller is not obligated to sell their property at, or anywhere near, the “asking” price. We see this ubiquitously in the San Gabriel Valley market.

4. Decide on Contingencies

Contingencies protect buyers but can also make offers less attractive to sellers. Common contingencies include:

• Financing contingency: Ensures you can secure a mortgage, if not, buyer can back out.

• Appraisal contingency: Protects you if the home appraises for less than your offer.

• Inspection contingency: Allows you to back out if significant issues arise during inspection. Generally considered the most protective contingency in a real estate transaction.

5. Submit a Strong Earnest Money Deposit

An earnest money deposit (EMD) shows the seller you are serious. In competitive markets, offering a higher EMD can make your offer stand out.

6. Submit Your Offer and Negotiate

Your agent will submit your offer to the seller's agent. If the seller counters, be prepared to negotiate on price, contingencies, or closing timelines.

7. Get Under Contract and Enter Escrow

Once your offer is accepted, the home goes into escrow. During this time, inspections, appraisals, and final mortgage approvals take place before closing.

Common Mistakes to Avoid When Making an Offer

• Lowballing in a Seller’s Market: Offers significantly below market value may not be considered.

• Skipping Pre-Approval: Sellers favor buyers with solid financing in place.

• Ignoring Contingencies: While fewer contingencies make your offer stronger, waiving important ones (like inspections) can be risky.

• Not Acting Fast Enough: Homes in hot markets move quickly—delays can mean losing the property to another buyer.

FAQs About Making an Offer on a House in Southern California

How much should I offer on a house in Southern California?

It depends on the local market conditions. In competitive areas, offers often need to be at or above the asking price and the offer amount should be supported by comparable sales in the area.

Can I make an offer without a real estate agent?

Technically, yes, but working with an experienced agent increases your chances of securing a home, especially in competitive markets.

How long does it take to hear back after making an offer?

Typically, sellers respond within 24-48 hours, but it can vary depending on the circumstances.

What happens if my offer is rejected?

You can submit a counteroffer, move on to another home, or adjust your strategy with your agent.

Is earnest money refundable if I back out?

It depends on your contingencies. If you back out due to a contingency clause, you can usually get your deposit back.

Final Thoughts

Making an offer on a house in Southern California requires preparation, strategy, and a clear understanding of the market. By following these steps and working with an experienced real estate agent, you can increase your chances of securing your dream home.

If you’re looking to buy in Southern California, contact a local expert to guide you through the process and craft a winning offer!