A comprehensive guide to making an offer guide from NMHL mortgage experts.
NMHL Editorial Team2026-02-188 min read
<p>Before you even look at a listing, you need a solid financial foundation. The most powerful tool at your disposal is an <strong>NMHL pre‑approval</strong>. Unlike a pre‑qualification, which is an estimate, a pre‑approval involves a credit pull, verification of income, and a review of assets, giving you a firm borrowing limit.</p>
<p><strong>Key numbers to know:</strong></p>
<ul>
<li>Minimum credit score for conventional loans: <strong>620</strong>. NMHL’s <em>FlexScore</em> program can approve borrowers with scores as low as <strong>580</strong> when other compensating factors exist.</li>
<li>Typical down‑payment ranges: <strong>3.5%</strong> for FHA, <strong>5%</strong> for conventional, and <strong>0%</strong> for VA loans.</li>
<li>Debt‑to‑income (DTI) ratio ceiling: <strong>45%</strong> for most conventional loans; NMHL can stretch to <strong>50%</strong> for qualified self‑employed borrowers.</li>
</ul>
<p>Action steps:</p>
<ol>
<li>Gather recent pay stubs, W‑2s, and tax returns (last two years).</li>
<li>Calculate your monthly obligations (student loans, car payments, credit cards) to estimate DTI.</li>
<li>Use the NMHL <a href="/tools/mortgage-calculator">Mortgage Affordability Calculator</a> to see how different down‑payment amounts affect your monthly payment.</li>
</ol>
<p>Having these numbers in hand not only strengthens your offer but also prevents surprises during underwriting.</p>
<p>Understanding the local market is essential for crafting a realistic yet competitive offer. Real‑estate data shows that in 2024 the median home price rose 6.2% nationally, but regional variations can be far wider. For example, the Pacific Northwest saw a 9.8% increase, while the Midwest experienced a modest 2.3% rise.</p>
<p>Steps to conduct effective research:</p>
<ul>
<li><strong>Review recent comparable sales (comps)</strong>—properties that sold within the last 90 days, within a half‑mile radius, and with similar square footage and features.</li>
<li>Check the <em>price‑per‑square‑foot</em> metric. If a home you like lists at $350,000 and comparable homes sold for $340,000, you may have room to negotiate.</li>
<li>Monitor days‑on‑market (DOM). A property with a DOM of 5–10 days often indicates a hot market, suggesting a stronger offer may be needed.</li>
</ul>
<p>Scenario: Jane, a first‑time buyer, found a 1,800‑sq‑ft home listed at $425,000 in Austin, TX. Recent comps showed $415,000 for similar homes. By offering $420,000 with a 3‑day escrow and an <strong>NMHL pre‑approval letter</strong>, she secured the property despite three competing offers.</p>
<p>Use NMHL’s <a href="/resources/neighborhood-insights">Neighborhood Insights</a> tool for free market reports and school ratings.</p>
<p>A well‑structured offer package signals seriousness and reduces the seller’s perceived risk. The core components include:</p>
<ol>
<li><strong>Offer price</strong> – based on comps, your budget, and any seller incentives.</li>
<li><strong>Earnest money deposit (EMD)</strong> – typically 1%–2% of the purchase price. For a $300,000 home, a $3,000–$6,000 deposit shows commitment.</li>
<li><strong>Financing contingency</strong> – outlines the loan type (e.g., 30‑year fixed, FHA) and the timeline for loan approval. NMHL’s <em>RapidClose</em> program can close in 21 days for qualified borrowers.</li>
<li><strong>Inspection contingency</strong> – allows you to renegotiate or withdraw if major defects are discovered.</li>
<li><strong>Appraisal contingency</strong> – protects you if the home appraises below the offer price.</li>
<li><strong>Closing timeline</strong> – a realistic date (often 30–45 days) that aligns with the seller’s needs.</li>
</ol>
<p>Tip: Attach a personalized cover letter. Sellers often respond positively to a brief note explaining why you love the home and how you plan to care for it.</p>
<p>Example Offer Summary:</p>
<blockquote>
<p><strong>Purchase Price:</strong> $310,000<br/>
<strong>Earnest Money:</strong> $6,200 (2%)<br/>
<strong>Financing:</strong> 30‑year fixed, 3.75% rate, NMHL pre‑approved<br/>
<strong>Contingencies:</strong> Inspection (10 days), Appraisal (15 days), Financing (21 days)<br/>
<strong>Closing Date:</strong> September 30, 2026</p>
</blockquote>
<p>Even a strong offer can receive a counter‑offer. Successful negotiation hinges on knowing your limits and the seller’s motivations. Common seller triggers include:</p>
<ul>
<li>Desire for a quick close.</li>
<li>Need for a higher price due to recent upgrades.</li>
<li>Preference for cash or low‑contingency offers.</li>
</ul>
<p>Negotiation tactics:</p>
<ol>
<li><strong>Increase earnest money</strong> by 0.5%–1% to demonstrate seriousness.</li>
<li><strong>Offer a rent‑back</strong> if the seller needs extra time to move.</li>
<li><strong>Adjust contingencies</strong>—for example, waive the appraisal contingency if you have a large cash reserve.</li>
<li><strong>Escalation clause</strong>—state you’ll automatically increase your offer by $1,000 above any competing bid up to a maximum amount.</li>
</ol>
<p>Real‑world example: Carlos received a counter asking for a $5,000 price increase on a $250,000 home. He responded by adding an extra $2,000 to the earnest money and offering a 2‑day faster escrow. The seller accepted, appreciating the reduced risk.</p>
<p>Remember: Every concession should be weighed against your budget and long‑term financial goals. NMHL loan officers can run “what‑if” scenarios to show how a higher purchase price impacts monthly payments.</p>
<p>Once the seller signs the purchase agreement, the focus shifts to satisfying contingencies and moving toward closing. Here’s a timeline to keep you on track:</p>
<table border="1" cellpadding="5" cellspacing="0">
<tr><th>Day</th><th>Milestone</th></tr>
<tr><td>1‑3</td><td>Submit earnest money and NMHL pre‑approval letter to escrow.</td></tr>
<tr><td>4‑10</td><td>Schedule home inspection; negotiate repairs if needed.</td></tr>
<tr><td>11‑15</td><td>Order appraisal; NMHL coordinates with approved appraisers.</td></tr>
<tr><td>16‑21</td><td>Finalize loan underwriting; provide any additional documentation.</td></tr>
<tr><td>22‑30</td><td>Review Closing Disclosure (CD); schedule final walk‑through.</td></tr>
<tr><td>31</td><td>Closing day – sign documents, transfer funds, receive keys.</td></tr>
</table>
<p>Key documents you’ll encounter:</p>
<ul>
<li><strong>Purchase Agreement</strong> – legal contract outlining price and terms.</li>
<li><strong>Loan Estimate (LE)</strong> – NMHL provides a detailed breakdown of fees within three business days of application.</li>
<li><strong>Closing Disclosure (CD)</strong> – must be received at least three days before closing; compare it to your LE for accuracy.</li>
</ul>
<p>Actionable tip: Set up automatic reminders in your phone or calendar for each deadline. Missing a contingency deadline can jeopardize the entire transaction.</p>
<p>Even experienced buyers fall prey to myths that can cost time and money. Below are the most frequent misconceptions and the truth behind them:</p>
<ul>
<li><strong>Myth:</strong> You must have a 20% down payment to be taken seriously.<br/>
<strong>Reality:</strong> NMHL’s FHA program accepts as little as 3.5% down, and VA loans require no down payment for eligible veterans.</li>
<li><strong>Myth:</strong> A higher credit score guarantees a lower interest rate.<br/>
<strong>Reality:</strong> While score matters, loan‑to‑value (LTV) ratio, DTI, and cash reserves also influence rate offers. NMHL’s <em>RateLock+</em> can lock a rate for 60 days, giving you flexibility.</li>
<li><strong>Myth:</strong> You should waive all contingencies to win a bidding war.<br/>
<strong>Reality:</strong> Removing contingencies eliminates protections. Instead, consider a limited‑contingency approach—e.g., keep the inspection contingency but waive the appraisal if you have a strong cash cushion.</li>
</ul>
<p>By recognizing these myths early, you can craft an offer that is both competitive and safe.</p>
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Frequently Asked Questions
A strong offer includes a competitive price based on recent comps, an earnest money deposit of 1%–2% of the purchase price, clear financing and inspection contingencies, a realistic closing timeline, and a personalized cover letter. Adding an escalation clause or a higher earnest money deposit can further demonstrate seriousness to the seller.
NMHL pre‑approval involves a full credit pull, verification of income, assets, and employment, resulting in a conditional loan amount that lenders trust. Pre‑qualification is an informal estimate based on self‑reported data and does not carry the same weight with sellers or real‑estate agents.
Yes. NMHL offers FHA loans with as little as 3.5% down and VA loans with 0% down for eligible veterans. Conventional loans may be available with 3% down for qualified borrowers, though private‑mortgage‑insurance (PMI) will apply until you reach 20% equity.
Review the counter‑offer carefully and decide which terms you can adjust without jeopardizing your budget. Common adjustments include increasing earnest money, shortening the escrow period, or offering a rent‑back arrangement. Consult your NMHL loan officer to run the financial impact of any changes before responding.
In a typical market, the timeline from accepted offer to closing ranges from 30 to 45 days. This includes inspection (5‑10 days), appraisal (7‑14 days), underwriting (10‑15 days), and final walk‑through. NMHL’s RapidClose program can compress this to as little as 21 days for qualified borrowers.
While not required in most states, an attorney can review the purchase agreement and ensure contingencies protect your interests, especially in complex transactions or when buying out of state. NMHL can recommend trusted legal partners in each of the 29 states we serve.
First‑time buyers often skip the pre‑approval step, underestimate repair costs, or waive essential contingencies to appear competitive. They may also overlook hidden fees such as escrow reserves or homeowner’s insurance. Using NMHL’s affordability calculator and following our checklist helps avoid these pitfalls.
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