You found the home. You've toured it, you've imagined your life there, and you're ready to make an offer. But in California — and especially in the Bay Area — making an offer is more than just naming a number. It's a legal document with terms, timelines, and financial commitments that shape the entire transaction.
Here's what you need to know before submitting an offer on a home in California.
The California Purchase Agreement (RPA)
In California, most residential offers use the Residential Purchase Agreement (RPA), a standard form from the California Association of Realtors. This document covers:
- Purchase price and terms
- Earnest money deposit amount
- Financing details (if not all-cash)
- Contingency periods and timelines
- Disclosures and inspection rights
- Closing date and possession terms
- Any personal property included in the sale
I'll walk you through every line of this document so you understand exactly what you're agreeing to before you sign.
Earnest Money: Showing You're Serious
Your earnest money deposit (EMD) is a good-faith deposit submitted with your offer. In California, it's typically held in escrow and credited toward your down payment at closing. If you default without a contingency protecting you, you could forfeit this deposit.
Typical Bay Area EMD: 1–3% of the purchase price. In competitive situations, 3% is common.
A higher EMD signals financial strength and commitment to the seller. But it also means more money at risk if something goes wrong outside of your contingency protections. I'll help you find the right balance.
Contingencies: Your Safety Net
Contingencies are conditions that must be met for the sale to proceed. If a contingency isn't satisfied, you can typically back out and recover your earnest money. Common contingencies include:
- Inspection contingency: Gives you the right to inspect the property and negotiate repairs or withdraw based on findings. Typically 7–10 days in California.
- Loan/appraisal contingency: Protects you if your lender denies financing or the appraisal comes in below the purchase price. Typically 17–21 days.
- Disclosure contingency: Gives you time to review the seller's disclosures and property reports. Often 5–7 days.
In a competitive Bay Area market, some buyers shorten or waive contingencies to make their offer more attractive. This carries real risk. I'll never pressure you to waive a contingency that puts you in financial danger — I'll explain the trade-offs so you can decide what's right for your situation.
Appraisal Gap Coverage
If the home appraises for less than your offer price, your lender will only finance based on the appraised value. The difference — the "appraisal gap" — must be covered by you in cash.
Some buyers include an appraisal gap coverage clause stating they'll pay a certain amount above the appraised value. This makes your offer stronger but means you may need to bring more cash to closing. I'll help you evaluate whether this strategy makes sense for your budget.
Cover Letters: Do They Help?
In a close race between similar offers, a personal cover letter to the seller can sometimes make a difference. Sharing why you love the home and how it fits your life can create an emotional connection — especially with owner-occupant sellers.
Important: Fair housing laws apply to cover letters. I'll guide you on what's appropriate to include so your letter is genuine without running afoul of any regulations.
How Long Does the Seller Have to Respond?
Your offer will include an expiration date. In a normal market, this might be 2–3 days. In a hot Bay Area market, offers may expire in hours. If the seller doesn't respond by the deadline, you can withdraw your offer or extend the deadline.
Sellers may respond in several ways:
- Accept: The offer is signed and the escrow process begins.
- Counter: The seller changes terms (price, timeline, contingencies) and sends it back for your approval.
- Reject: The seller declines outright.
- Request "highest and best": In multiple-offer situations, the seller may ask all buyers for their best offer.
What Happens After Your Offer Is Accepted?
Once your offer is accepted, the escrow process begins. Your earnest money is deposited, inspections are scheduled, your lender orders the appraisal, and the transaction moves toward closing. I'll coordinate every step and keep you informed throughout.
The typical escrow period in the Bay Area is 21–30 days, though it can be shorter or longer depending on the terms of your offer.
Don't Navigate This Alone
Making an offer is one of the most important financial decisions you'll ever make. The terms of your offer affect your money, your timeline, and your protections throughout the transaction. I'll help you craft a strong, competitive offer — one that gives you the best chance of winning without putting your financial future at risk.