Making a Competitive Offer on Your First Home: A Step-by-Step Guide

You found the right home. You can picture yourself sitting on that porch, cooking in that kitchen, raising your family in those rooms. Then comes the moment every first-time buyer dreads: actually making the offer. What do you offer? What contingencies do you keep? What happens if someone else bids too?

Let's have a conversation about how this actually works. I have walked hundreds of first-time buyers through this moment over the past 35-plus years, and I promise you, it is not as scary as it seems when you understand what goes into a strong offer.

Here in West Covina and the San Gabriel Valley, homes typically sell for about 101% to 102% of their list price and stay on the market an average of 33 to 70 days, depending on the specific city and how well the home is priced. That means some homes still get snapped up fast, while others give you room to breathe. Knowing the difference is key to making an offer that wins the house without overpaying.

Start With a Pre-Approval Letter, Not Just a Pre-Qualification

This is the single most important thing you can do before writing an offer. A seller's agent looks at your offer and the first question they ask is, "Can this buyer actually get the loan?" A pre-approval letter from a reputable lender says yes. A pre-qualification, which is just a quick estimate based on what you told someone, says maybe.

In a competitive situation, the seller's agent will not waste time on a maybe. You need a full pre-approval where the lender has already reviewed your income, credit, and assets. When I represent a first-time buyer, I make sure they have this in hand before we even start looking at homes. It gives us confidence and lets us move fast when the right property comes up.

Understanding Earnest Money

Every offer comes with an earnest money deposit. This is a good-faith deposit you put down to show the seller you are serious. In our area, the standard earnest money deposit typically ranges from 1% to 3% of the purchase price. On a $700,000 home, that is $7,000 to $21,000.

Now, I want you to know something important: this money is not lost unless you breach the contract. If the deal goes through, it goes toward your down payment and closing costs. If the deal falls apart for a reason covered by your contingencies, you get it back. Think of it as a sign of commitment, not a risk. A higher earnest money deposit can make your offer stand out, especially when a seller is comparing multiple offers. It shows you are financially solid and ready to close.

What Price Do You Offer?

This is where I earn my keep. Pricing strategy in today's San Gabriel Valley market is not about guessing. It is about looking at the comps, the condition of the home, how many days it has been on the market, and what similar homes have actually sold for in the neighborhood.

Right now, the market here is shifting toward being more balanced than it has been in years. Inventory is up about 18% compared to last year across the San Gabriel Valley, and sellers are starting to adjust their expectations. About one in three active listings has had a price reduction. That means there are deals to be found, but you still need to compete on the homes that are priced right and show well.

In West Covina specifically, the median home price is around $820,000 to $865,000. A well-priced, well-maintained home in a desirable neighborhood might still attract multiple offers. But you also see homes sitting for 60 or more days, and those sellers are often open to negotiating. The key is knowing which situation you are walking into and pricing your offer accordingly.

Contingencies: Which Ones Should You Keep?

A contingency is a condition that must be met for the deal to go through. As a first-time buyer, you absolutely want to protect yourself. Here are the three main ones:

Inspection contingency. This is the most important one for first-time buyers. It gives you the right to have the home professionally inspected and, if serious issues come up, either negotiate repairs or walk away. I strongly recommend never waiving this contingency on your first home. The inspection reveals things you would never notice on a walkthrough, and you deserve to know what you are buying.

Appraisal contingency. This protects you if the home appraises for less than your offer. The lender will only loan you the appraised value, so if you offer $700,000 and the appraisal comes in at $680,000, you need the appraisal contingency to renegotiate or walk away without penalty. In a hot market, some buyers waive this, but I usually advise first-timers to keep it unless we have a very specific reason not to.

Loan contingency. This gives you time to finalize your mortgage. If your loan falls through for reasons outside your control, this contingency lets you get your earnest money back. Keep it. You need it.

Multiple Offers: What Do You Do?

Sometimes you find a home that other people love too. When that happens, the seller's agent may ask for everyone's best and final offer by a certain deadline. It can feel stressful, but here is how I guide my buyers through it.

First, we decide what the home is truly worth to you, not just what the comps say. Then we structure an offer that is competitive but still leaves you comfortable. Sometimes that means offering slightly above asking. Sometimes it means strengthening the terms, like a larger earnest money deposit or a shorter escrow period. Sometimes we write a personal letter to the seller about why you love the home. That human touch matters more than people realize.

But here is what I will never do: push you into offering more than you can afford just to win a bidding war. I have been doing this since 1988, and I have learned that the right home comes along when it is meant to. Overpaying out of fear is one of the biggest mistakes first-time buyers make.

Understanding Disclosures

Before you make an offer, the seller is required to provide certain disclosures about the property. These documents tell you about known issues with the home, from past roof leaks to neighborhood nuisances. Read them carefully. If something looks concerning, ask about it before you submit your offer. The disclosure package is there to protect everyone involved, and as your agent, I review every page so you do not have to figure it out alone.

In California, sellers are required to disclose a lot. The Transfer Disclosure Statement (TDS), Natural Hazard Disclosure, and any known material defects are all standard. If a seller tries to shortcut this process, that is a red flag. I have seen too many buyers skip the fine print and regret it later.

When a Complimentary Living Trust Makes Sense

Once your offer is accepted and you are moving toward closing, there is something else I want you to think about: protecting your home for the long run. Every client who buys or sells a home with me receives a complimentary Living Trust as part of our work together. It is one of the most thoughtful things you can do for your family. Your home is likely the largest asset you will ever own, and having a trust ensures that it passes to the people you love without the hassle and expense of probate. It is not something most first-time buyers think about on day one, but the ones who have it are so grateful later.

Let's Walk Through This Together

Making an offer on your first home does not have to feel like a guessing game. When you have someone in your corner who has done this hundreds of times, the process becomes clear. We talk through every number, every contingency, every page of the contract. I answer your questions, even the ones you feel silly asking. There are no silly questions when it comes to buying your first home.

If you are thinking about buying in West Covina or the San Gabriel Valley and do not know where to start, that is exactly what I am here for. Let's have a conversation. I can walk you through the market, help you get pre-approved, and be with you every step of the way until you are holding the keys to your new home.

I am here to help you.