Strong Terms for Silicon Valley Home Offers

Strong Offer Terms

In the competitive Silicon Valley real estate market, presenting a strong purchase offer is crucial to secure your dream home. This comprehensive guide will take you through the key components of a robust home purchase offer, helping you navigate this intricate process with ease. If you want to have the best shot about buying your favorite home, you need to come to grips with making an offer using at least some of these strong terms for Silicon Valley home offers.

Understanding the Home Purchase Offer

A home purchase offer, sometimes referred to as a purchase agreement, is a legally binding contract between the buyer and the seller. It outlines the terms and conditions of the home purchase, including the offer price, contingencies, closing date, and more.

What Constitutes a Strong Offer in Silicon Valley?

A strong offer is a combination of a competitive offer price, minimal contingencies, substantial earnest money deposit, flexible closing date, and a pre-approved mortgage. This blend signals to the seller that the buyer is serious, financially stable, and ready to close the deal swiftly.

Elements of an Effective Purchase Offer

Competitive Offer Price

The offer price is the most tangible component of your proposal. It’s not just about being the highest bidder; it’s about making a fair offer that aligns with the home’s market value and will appeal to the seller. A competitive market analysis (CMA) can provide insights into similar properties’ selling prices in the area, helping you make an informed offer.

Mortgage Pre-Approval

A mortgage pre-approval letter from a reputable lender strengthens your offer by demonstrating your financial capability to purchase the home. This document reassures the seller that you have undergone a thorough financial review, reducing the risk of loan approval issues down the line.

Earnest Money Deposit

An earnest money deposit (EMD) is like a good faith deposit, signaling the seriousness of your intent to purchase the home. While typically ranging from 1% to 3% of the purchase price, a higher EMD can make your offer more attractive to the seller.


Contingencies are conditions that need to be met for the transaction to proceed. Common contingencies include home inspections, appraisal, and loan approval. While these offer protection to the buyer, too many contingencies can deter the seller. Opting for shorter contingency periods or waiving certain contingencies can strengthen your offer.

Closing Date

The closing date is when the property’s title is transferred from the seller to the buyer. Being flexible with the closing date and aligning it with the seller’s timeline can make your offer more appealing.

Hey Buyers, It’s Rough out There!

Strategies to Enhance Your Purchase Offer

Get Serious with the Earnest Money Deposit

Make sure that your earnest money deposit is at least 3% of the purchase price – and go ahead and offer more than that if you want to show that you’re really serious.¬† Also, offer to put your deposit into escrow within 1 business day of acceptance of your offer.

Increasing Down Payment

A substantial down payment, typically 25-50% of the purchase price, signals to the seller that you are financially stable and less likely to encounter financing issues.¬† In fact, even just showing the seller that you have a significant cash cushion you can draw on if needed may be all that’s needed, while keeping your loan amount to whatever is required for your loan’s debt-to-equity guidelines.

Provide Proof of Available Cash

The California Residential Purchase Agreement (RPA) states that the buyer is to provide the seller with proof of their down payment and closing costs with seven days of mutual acceptance of the purchase contract. However, in a competitive market like Silicon Valley, it’s common to provide that proof along with your initial offer.¬† It’s good practice to show as much “liquid” cash as you reasonably can though – sellers want to know how strong you are, and your capacity to pay above appraised value if need be, even if the down payment on your offer is significantly less than your available cash.

Show a Higher Pre-Approval Amount

Many Silicon Valley buyers (and REALTORs and mortgage brokers) want to see that the approval amount on the pre-approval letter matches the offer price.¬† Buyers often worry that if their pre-approval amount shows a number greater than their offer price, that sellers will want the buyer to pay more than what they’re offering.¬† In practice, that isn’t really the case, and it’s not even close to your biggest worry.¬† To make a strong offer you’ll want to show that you have considerable headroom with your loan, which assuages worries on the part of the seller that you can “barely qualify” for the loan you’ve specified in your purchase offer.

All-Cash Offer

If possible, an all-cash offer can significantly increase your offer’s appeal. Cash transactions can close faster and carry less risk of financing fall-throughs, making them attractive to sellers.¬†¬†While you may not have cash, there are a number of startup companies that will now loan you the cash you need (for a price, etc.) to make all-cash offers on BayArea real estate. Examples of such companies include Sailbridge and Knock¬†(for when you have a house to sell as well).

Pay the Seller’s Closing Costs

Another way to make your offer stand out is to pay the seller’s closing costs.¬† Depending on the purchase price and municipality, the closing costs for the seller could run into the tens of thousands of dollars. Offering to pay these costs for the seller will increase their net cash on sale, and has the added benefit of keeping the sale price low (which is good for your tax assessment).

Offer a Free Rent Back

Give the seller a free rent back if they want one.  This may end up costing you thousands of dollars Рperhaps even tens of thousands of dollars if your mortgage is high Рbut often times this will really help you win the day in a competitive situation.

Let the Seller Leave their Junk Behind

The standard California Residential Purchase Agreement says that the seller is to leave the home free of personal belongings at the time escrow closes (or the day they vacate the property, if they’re getting a rent back).¬† Often times, this can be really difficult for a seller, especially one who is older or who has been in the home a long time. Offer to let the seller leave all their unwanted property behind – it may only cost you a few thousand dollars or a day or two of time, but it can really help sweeten the deal with lots of sellers.

What to Avoid in Your Purchase Offer

Avoid making your offer contingent on the sale of your current home. This can make your offer less attractive as it introduces an additional layer of uncertainty for the seller. You may be able to obtain bridge financing that could obviate the need for an offer contingent on the sale of your current home.  While this financing may cost you thousands of dollars, in the grand scheme of things, it will probably all just be water under the bridge.

Also, avoid asking the seller to pay for extra fees or a home warranty. These can affect the seller’s bottom line and make your offer less appealing.

Final Thoughts

Crafting a winning home purchase offer requires a strategic blend of competitive pricing, minimal contingencies, adequate earnest money, and flexible closing dates. Coupled with a mortgage pre-approval and a personal touch, your offer can stand out in a crowded market. Remember, every home purchase scenario is unique, and it’s essential to tailor your offer to the specific circumstances. A seasoned realtor can guide you through this process, helping you secure your dream home.

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About the Author
Seb Frey helps long-time Bay Area homeowners make their next move easily the next one yet. If you're looking for a minimum of hassle, maximum net cash on sale, and certain results, contact Seb today.