# How to make a strong offer on a house: price, credits and terms Source: https://nobullshitloans.com/buy/making-an-offer/ By Tyler Rood, Loan Officer, NMLS ID # 2064776, Edge Home Finance, LLC (NMLS ID # 891464). Updated 2026-11-09. ## The short answer With financing, a strong offer is built on terms, not just price. If cash is tight, ask for a seller credit, not a price cut: each $1,000 off the price saves about $6 to $7.50 a month, while each $1,000 of credit is $1,000 less to bring to closing. Put the price and credit in the contract before the appraisal is ordered, within your program's cap, and push harder or softer by how much you want the house. Most buyers think a strong offer means the lowest price they can talk a seller into, or the biggest number in a bidding war. If you're financing, the answer to how to make a strong offer on a house starts somewhere else: with what you will run short of first. For most buyers that's cash at the closing table, not the monthly payment. Your agent owns the house and the contract. I own the money side, and this is the math I run before an offer goes out. ## How to get a good deal on a house: seller credit vs price reduction My rule when a buyer is financing: concessions over reductions. Ask the seller to pay part of your closing costs before you ask them to drop the price. The reason is how mortgage math works. A price cut comes off the loan, and the loan spreads every dollar across 360 payments. My back-pocket rule is that each $1,000 of price moves your payment only about $6 to $7.50 a month, depending on the rate. A seller credit comes straight off the cash you bring to closing, dollar for dollar. Here are both on a $400,000 house with 5% down. **Worked example: $10,000 off the price, or $10,000 toward closing costs** - Seller credit: your closing costs drop by all of it: $10,000 - minus Price cut: your down payment drops by 5% of it: $500 - equals: More cash in your account with the credit: $9,500 Note: The price cut does lower your payment, by about $60 a month. At that pace it takes about 158 months, roughly 13 years, to add up to $9,500. _Hypothetical: $400,000 home, 5% down, 30-year fixed at an example rate of 6.5%, principal and interest only. Taxes and mortgage insurance would move a few dollars more._ **Chart: How long a price cut takes to match a seller credit.** A $10,000 price cut saves about $60 a month. It takes about 158 months, roughly 13 years, to add up to the $9,500 the credit leaves in your account. | Months of payments | Payment savings from the price cut | |---|---| | 0 | $0 | | 24 | $1,440 | | 48 | $2,880 | | 72 | $4,320 | | 96 | $5,760 | | 120 | $7,200 | | 158 | $9,480 | Reference line: Extra cash with the credit $9,500. _$400,000 home, 5% down, 30-year fixed at an example rate of 6.5%, principal and interest only. Savings counted at about $60 a month. Hypothetical, not a quote._ Congratulations, you knocked $10,000 off the price. You saved about $60 a month. I plan most first homes around a 3 to 7 year hold, so a 13-year payback almost never wins, while the credit leaves $9,500 in your account for reserves and the first repair. The credit isn't free, and I won't pretend otherwise. Compared with the price cut, your loan is about $9,500 bigger, and over five years the extra interest on it runs about $3,000. For a buyer whose savings are the tight spot, I'd take that trade: a mortgage is usually the cheapest money a household borrows, and cash you keep at closing is hard to replace later. To see how down payment, closing costs and prepaids stack up for your purchase, start with [how much cash you need to close](https://nobullshitloans.com/buy/cash-to-close/). A seller can also hand you that same $10,000 as a permanent rate buydown or a temporary one. On the same dollars, a seller-paid buydown usually drops the payment far more than a price cut does, and whether it beats a closing-cost credit comes down to break-even and how long you keep the loan, which I lay out on [points, lender credits and buydowns](https://nobullshitloans.com/buy/points-and-buydowns/). **My take** If the seller's side offers $5,000 off the price, counter by asking for $5,000 toward your closing costs instead. It's the same money to the seller, and with 5% down it does twenty times more for the cash you bring. ## When a price cut is the better ask Concessions over reductions is my default, not a law. A price cut wins in a few cases: - **You have plenty of cash and want the lowest payment.** If cash isn't the constraint, the smaller loan is slightly cheaper over time. - **Your debt-to-income ratio is right at the limit.** At the edge, $60 a month can decide the approval, so I run your ratio before your agent trades price for anything. Here's [how lenders measure what you can afford](https://nobullshitloans.com/buy/how-much-house-can-i-afford/). - **You're paying cash.** With no loan, a credit and a price cut are close to the same money. - **The list price is already a stretch against recent sales.** A credit at full price only works if the house appraises at full price. If the comparable sales say it's worth less, negotiate the price. ## Offering over asking with a seller credit Sometimes the best structure is the opposite of a price cut: offer a little over list and ask for a credit of the same size. The seller nets the same money, and you bring less to closing. | Offer on a $400,000 listing | Seller's net, before their own costs | Your loan, 5% down | Principal and interest | Cash you bring | |---|---|---|---|---| | $390,000, no credit | $390,000 | $370,500 | $2,342 | $31,500 | | $400,000, no credit | $400,000 | $380,000 | $2,402 | $32,000 | | $400,000 with a $10,000 credit | $390,000 | $380,000 | $2,402 | $22,000 | | $410,000 with a $10,000 credit | $400,000 | $389,500 | $2,462 | $22,500 | *Hypothetical: 30-year fixed at an example rate of 6.5%, with $12,000 of closing costs and prepaids held the same at every price.* Read the bottom two rows against the top two. Same seller net, and the buyer brings $9,500 less for about $60 a month more. That's why, when a seller pushes back on a credit, I'd rather move the price than drop the credit. Going up about 1% on price and holding the full credit is often the better counter. It only works under three conditions. The price and the credit both go in the contract before the appraisal is ordered. The house has to appraise at the contract price. And the credit has to fit your program's cap and your actual costs. ## Why the price and the credit go in before the appraisal is ordered On a complete file, my standard is to order the appraisal within a day of a ratified contract. The appraiser works from that contract, credit included, and the lender sizes your loan, your cap and your disclosures from it. So the structure has to be settled before that order goes in. Buyers sometimes ask whether they can raise the price after a strong appraisal so the seller can cover more of their costs. We can't get the appraisal back and then increase the purchase price. Once the value is known, a new price means a new contract, new disclosures and a credit that still has to fit the cap. Decide the structure up front and keep all of it in the open, where the lender and the appraiser can both see it. Have your agent word the credit broadly: toward the buyer's closing costs, prepaids, discount points and any temporary buydown. If your final costs come in lower than expected, the leftover can still go to work instead of disappearing. ## How much can the seller pay? Seller concession limits by loan program Every loan program caps how much the seller, and anyone else with a stake in the sale, can put toward your costs. These are the limits as of November 2026. **Seller credit limits, November 2026** - Conventional, home you'll live in or a second home, under 10% down: 3% (of the lower of price or appraised value) - Conventional, 10% to under 25% down: 6% (of the lower of price or appraised value) - Conventional, 25% or more down: 9% (of the lower of price or appraised value) - Conventional, investment property: 2% (of the lower of price or appraised value) - FHA: 6% (of the sales price) - VA: 4% (of the home's reasonable value from VA's appraisal, for concessions such as paying the funding fee, paying off your debts or prepaying your insurance. Normal closing costs the seller pays are not limited.) - USDA: 6% (of the sales price) *Conventional tiers go by loan-to-value, counting any second mortgage.* The rules that apply to all of them: - **A credit pays real costs only:** closing costs, prepaids and escrow deposits, discount points or a buydown. It never pays your down payment, and it never comes back to you as cash. - **Anything over the cap doesn't become yours.** Conventional and FHA rules treat the excess as a cut to the price when the lender figures your loan-to-value, which can throw off the whole structure. FHA treats a credit bigger than your actual costs the same way. - **A repair credit after the inspection uses the same room.** On a $400,000 home with a conventional loan and 5% down, the cap is $12,000. If $10,000 is already written in, a repair credit can add only $2,000. - **A credit bigger than your costs needs a job** before the Closing Disclosure is drawn up: discount points, a buydown, or on a VA loan, paying off a debt inside the 4%. - **Lender credits are a separate pot.** On FHA, a lender credit (the rebate you get for taking a slightly higher rate) doesn't count toward the 6%, as long as the lender isn't also the seller, the builder or the agent. On conventional loans I confirm how the lender treats it before I count on it. Program limits change, so check with me before a credit goes into an offer. ## Like it, love it, gotta have it: how hard to push on each house Right after a showing, before the house blurs into the next one, I have buyers put it in one of three buckets. Not a score from 1 to 10: on a ten-point scale everything comes out a 7, and a 7 tells me nothing about how to build the offer. Think of the cup sizes at an ice cream counter. Small, medium, large. You know which one you want. The bucket sets the structure. On a $400,000 listing in late 2026, I'd usually start here: **Like it, love it, gotta have it on a $400,000 listing** | | Like it | Love it | Gotta have it | |---|---|---|---| | What it means | Doors, windows and a roof. Fine if you lose it. | You'd be disappointed to lose it. | You'd regret losing it. | | Price | Below list, around $390,000 | At list, or a little over with a matching credit | At list, or a little over | | Credit ask | What you need, up to the cap, around $10,000 | $5,000 to $10,000 toward closing costs | Small or none if other buyers are circling | | Budget | Stays inside what you plan to spend | Can stretch the payment or the cash, not both | Up to the most you're willing to spend | Like it closes numbers. Gotta have it closes emotion. On a like-it house you can push on price and credit together, because walking away is an acceptable outcome. On a house you love, pick one route: asking for a lower price and closing help on the same offer is beating the seller up on price twice, and it can cost you the house. If the seller won't give a credit on a love-it house, bend. A slightly higher rate can earn a lender credit, and you cover the small piece left over. On a gotta-have house, the question is whether anyone else wants it. With other buyers circling, a credit ask can cost you the house, so I keep it small or skip it. With no competition, a modest ask is fine. Either way, I don't tell buyers to blow past asking by tens of thousands of dollars. The budget row comes from the work we do before you shop on [how much house you can afford](https://nobullshitloans.com/buy/how-much-house-can-i-afford/). ### How big a credit to ask for Ask for the full amount you need, up to the cap, unless the listing agent has already said no. The worst case is a no. The usual case is a split. Days on market is your leverage: in my experience a house that has sat about 18 days gives you room, and one that has sat 45 days should take a $10,000 ask seriously. Keep perspective, though. $20,000 on a $400,000 house is 5% of the price, and that's a big ask. Put the ask in your first offer. Coming back for $5,000 more after the seller agreed to a structure costs you credibility for the rest of the deal. For context, in the past year I can count on one hand the times my buyers ran into multiple offers. This isn't 2021, and credits have been showing up in more of the contracts I see. ## The appraisal contingency, and what happens to your credit if value comes in short In this market I keep the appraisal contingency in almost every offer. It's what lets you renegotiate, or walk away under your contract's terms, if the house appraises below the price. Your agent owns the contract language. I make sure the money side of it is settled before anyone signs. The question to settle up front is what happens to your credit if the value comes in short. My preference is to write the credit as a fixed dollar amount, so a $10,000 shortfall becomes a $10,000 conversation about price while your credit stays where it is. Some sellers will want the price and the credit to come down together so their net doesn't move. That can work too, but your cash to close goes up, so know your number before you agree. Whichever you choose, put it in the contract. A credit only stays put if the paper says so. What to do when a low value actually lands is on [my appraisal page](https://nobullshitloans.com/buy/appraisal/). If bidding wars come back, there's a structure I built for them that I call the appraisal gap theory. It lets a buyer putting more than 5% down waive the appraisal contingency on a gotta-have house with a fixed cash budget, where a low appraisal is absorbed by an insurance reserve planned inside that budget instead of an open-ended cash gap. In late 2026 it's a situational tool, not my lead play: here is [how the appraisal gap structure works](https://nobullshitloans.com/agents/winning-offers/), and the [appraisal gap calculator](https://nobullshitloans.com/tools/appraisal-gap/) runs your numbers. ## How to make a good offer on a house: round numbers and clean terms **Round numbers.** I ask agents to put offers at a clean price: $360,000, not $359,999. Every number on your loan runs off the price, from the down payment and loan amount to the credit cap and the mortgage insurance, and an odd price makes all of it messy for no gain. **Terms beat money.** A buyer with no home-sale contingency, a closing date that fits the seller's plans and a file that's already documented can beat a list-price offer that depends on selling another house first. I only issue a pre-approval once the file is ready for an underwriter. **What your agent gets from me before the offer goes out:** - A pre-approval letter issued at the offer price for that address, not at your maximum, so the listing side sees a strong buyer without seeing your ceiling. Text me the address and it usually goes out the same day. - Real numbers for that house: the county's tax, the HOA dues, and a fee sheet with and without the seller credit. - For a big decision, a three-way call with you, your agent and me, with the options side by side at the same rate: a lower price, list price with a credit, a higher price with a credit, and the credit aimed at the rate. - A call from me to the listing agent once the offer is in, so they hear from me directly. ## How to make a strong offer on a house, step by step 1. Rate the house right after the showing: like it, love it or gotta have it. 2. Text me the address. I'll send real numbers for that house, with and without a seller credit. 3. Pick the structure: a lower price, a credit, or a higher price with a credit, inside your program's cap. 4. Keep your appraisal contingency and settle what happens to the credit if the value comes in short. 5. I issue a pre-approval letter at the offer price, and your agent sends a clean, round-number offer with the credit worded for closing costs, prepaids, points and buydowns. 6. Once the contract is ratified, my standard on a complete file is to lock with your OK, send disclosures, order the appraisal and title, and submit to underwriting within a day. Here is [what happens after your offer is accepted](https://nobullshitloans.com/buy/steps/). None of this is about squeezing a seller. It's about signing a deal you can actually close, with money still in your account the day you get the keys. Send me the address before the offer goes out, and we'll build it together. ## Frequently asked questions ### Can I get cash back if the seller credit is bigger than my closing costs? No. A seller credit can only pay real costs, such as closing costs, prepaids, discount points or a buydown. If it ends up bigger than your costs, the extra is usually lost or treated as a cut to the price, so give it a job before the Closing Disclosure is drawn up. Your own money already in the deal, like your earnest money deposit, is a different story, because getting your own money back is not cash back from the seller. ### Can my lender tell me if a house is overpriced? Not really, and be careful with any lender who says yes. I'm a loan officer, not an agent. I know enough about value to be dangerous, not enough to be lethal. Your agent pulls the comparable sales before the offer, the appraisal checks the price after, and my job is showing you what each price does to your payment and your cash. ### Can I back out if the numbers come in higher than I expected? That depends on your contract's contingencies and deadlines, which your agent handles, and your contract and state law decide what happens to your earnest money. That's why I run the payment and cash to close for the exact house before the offer goes in. If anything changes after that, tell me the same day, while your contract windows are still open. ### Should I offer $30,000 under asking? Only on a house you'd be fine losing. With 5% down at an example rate of 6.5%, $30,000 off the price saves about $180 a month and $1,500 of down payment, and a cut that big is the offer most likely to get a flat no. A full-price offer with a credit toward closing costs usually does more for the cash you actually have to bring. ## Sources - [Fannie Mae Selling Guide B3-4.1-02, interested party contributions](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) - [HUD Handbook 4000.1 (Update 18), interested party contributions and inducements](https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf) - [VA.gov, VA funding fee and loan closing costs (seller concessions)](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) - [7 CFR 3555.102, USDA seller contribution limit](https://www.law.cornell.edu/cfr/text/7/3555.102) ## Disclosures Individual Originator: Tyler Rood, Loan Officer, NMLS ID # 2064776 (www.nmlsconsumeraccess.org). Licensed in NC, PA, TX and VA. Edge Home Finance, LLC | NMLS ID # 891464 | www.nmlsconsumeraccess.org. Licensed in all U.S. states & D.C., EXCEPT New York. Edge Home Finance, LLC is a mortgage broker, not a direct lender or creditor. Virginia Broker License MC-7006. North Carolina Mortgage Broker License B-201539. Pennsylvania Mortgage Broker License 81041. Texas: Mortgage Company License, Department of Savings and Mortgage Lending. Numbers on this page are illustrations, not offers. Any rate shown on this site is an example. Rates may change or may not be available at the time of loan commitment or lock-in. Edge Home Finance, LLC is a private mortgage broker and is not affiliated with, endorsed by, or acting on behalf of or at the direction of the U.S. Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD), or any other government agency. We do business in accordance with the Fair Housing Act and the Equal Credit Opportunity Act.