Real Answers Pt. 5: What You Must Know Before Making Your First Offer

Most first-time buyers lose out because they’re not ready to act—this episode shows you exactly how to prepare before the home even hits your inbox. Too many buyers start shopping before they’re ready to offer—and it costs them. In Part 5 of the Real Answers series, you’ll learn what it really means to be “offer-ready” and how to prepare for your first purchase with confidence and clarity. From contingencies and timelines to communication strategies with your agent, this episode is a playbook for writing a smart, complete offer the moment the right home appears. If you want to avoid rookie mistakes and actually win the home you fall in love with, this is your must-hear guide.

Quote
“If you’re not ready to make an offer before you start looking, you’re just a shopper, not a buyer.”

Highlights:

Why most first-timers delay too long—and how to avoid their biggest regret
The critical difference between “liking a home” and being ready to offer
What makes a complete offer package (and what most buyers miss)
How fast timelines move once you find the one
Contingency truths: which ones protect you vs. kill your deal
Why prepping before you tour is your biggest advantage

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Listen to the podcast here

Real Answers Pt. 5: What You Must Know Before Making Your First Offer

Welcome back to the twenty most frequently asked questions by first-time home buyers. I still haven’t even hit the halfway mark yet, so let’s get cracking.

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What is up, my How to Buy a Homies? I’m still your humble host, David S., finding your questions and dedicated to getting you the clearest, most efficient, most effective answers so you can avoid the confusion of the confounding internet rabbit holes when you’re trying to buy a home. Let’s keep going. Question number ten. How do I know what home is right for me?

Defining The “Right” Home: Beyond Dreams & Emotion

If you’re asking this, I think I have one answer for you. You probably don’t yet and that’s okay. I’ve talked to thousands, I’m getting on tens of thousands first-time home buyers and I can’t count how many times people have told me, “We thought we knew exactly what we wanted, but,” and then they end up buying something completely different. Why? It’s because your first ideas are often based on the dream, the emotion, the fantasy, not strategy, which can often make for a surprise left turn when you combine your personal and financial goals with the dream, the emotion and the strategy.

Your first ideas are often based on the dream, the emotion, the fantasy, not strategy. That’s why, when you combine your personal and financial goals with the dream, the emotion, and the strategy, it can lead to a surprising left turn.

That’s why I always say when you’ve got everything involved, a rent replacement strategy, it is much different than that original dream of becoming a homeowner. Many times, you have a lot more options than you think, and with the right information, a whole new and exciting path can open up for you. Let me hit you with a real-life example.

There was a homie named Emily and she came in hocked. I mean, she was determined to get a cute two-bedroom bungalow in her favorite hipster part of town. She was ready to DIY the whole thing and make all of her HGTV renovation dreams come to life. Of course, then she met her unicorn realtor. She got some honest, real evaluation as she started talking about her own lifestyle, her commute came into it a lot, and she realized that what she thought she wanted was actually a time and money vampire, sucking her real goals dry.

She ended up with a three-bedroom condo closer to work with better schools, lower maintenance, and then room to grow. Now, that wasn’t the dream that she had originally had, but it turned out to be the perfect home for her real life. Also, on the show, we had Luca and Sarah, another couple who thought they wanted to wait until they could afford a nice house, but they really wanted that yard.

If you’re not ready to make an offer before you start looking, you’re just a shopper, not a buyer.

After they sat down and went through all their numbers, did all their calculations, had their talk with their unicorn team, both realtor and lender, they realized that they had the opportunity to jump into a starter home and maybe it might have just a balcony, but they could save that yard dream for round two. They’d start building their equity right now. They pivoted and they bought a two-bedroom townhouse. In three years, because they got in at the right time, whether it was low inventory and the new prices were going to go be going up, they’re already talking about upsizing because they’re sitting in almost $100,000 in appreciation.

It’s not always about compromising for the sake of strategy either. I just want to lay the groundwork here for your mind. Don’t think that you’re going to have to make all these huge sacrifices and flexibility. Once you embrace the math of getting in as soon as you can, understanding that by using your rent as soon as possible to grow all your possibilities, you might discover that maybe let’s try this stepping stone play.

The Crucial Role Of A Unicorn Realtor & Comprehensive Planning

Remember, I’ve got years of homies that have reached out to me, thousands of them, and 72% of them were more ready than they thought they were. They ended up in a home under contract in 3.2 months. Oftentimes, that was a lot more home than they believed was possible. The key is to build your team, especially that experienced unicorn-style realtor. Someone’s going to listen to your goals and help you discover what actually fits your life, your budget, and your timeline.

You might walk in thinking, “I need a house with a yard for my dog,” and then you realize what you really need is walkability, maybe good insulation in the house and a low commute because you don’t want that stress in your life. Maybe you figure out that you dream of a top-floor unit with views, but then when you go out and look at homes, it turns out that those lower levels have a huge private patio.

I’m super into big barbecues on the weekends and besides, save my knees for a few years. I don’t need the stairs. A great realtor isn’t just going to open doors. First, they’re going to ask all the right questions and then they’re going to make sure that you can see all the trade-offs. They’re going to help you test drive the lifestyle that comes with each property.

That’s where full financial evaluation and planning comes in. Taking into account all of your goals, everything that is part of you being a homeowner. If you just get a simple loan approval to see if you can buy a home, that’s just the starting point. After that, you get strategic. You discover what you should do to build your life with this first purchase as the foundation for everything else.

Yeah, I just dropped my favorite home-buying wordplay. The strategy of your home purchase builds a solid foundation. Get it? Yeah. It’s not just about the walls and the windows. It’s about the home that fits your life. Now here’s a giant tip, like an enormous mindset shift that is going to help you make tens, even hundreds of thousands of dollars when you’re trying to figure out what home is the right home for you to buy.

Spend 10 times the time and energy researching all of the different options instead of just focusing on 1 because what you’re going to be doing is you’re going to be looking at all the options and you’re going to be looking at it through the lens of all of your financial and personal goals. You really want to do that over what I hear most first-time home buyers think about, which is, “What kind of house do I want to buy? What should I be looking at during the home tours when I’m going out? What are the little red flags for me? Definitely, what do I look at in the inspection?”

I understand it sounds weird for someone who helps people buying homes to say forget all those crazy, deep evaluations about the home. Spend ten times working on figuring out all the options that you can explore on what kind of home could be your first purchase and way, way less stress on what are the red flags.

I understand the money pit fears are so prevalent, but I can tell you this, they are so ridiculously overblown on the internet, especially in the first-time home buyer subreddits. When I read them, all I can think is any halfway decent realtor would’ve spotted that issue that you’re so concerned about a mile away. It wouldn’t even be part of, “Is this a red flag or not?” You would’ve someone next to you going, “Bright red, run fast.”

I see it all the time. Novice, first-time home buyers end up just really overanalyzing a $5,000, $10,000, $20,000 physical issue on the home. It’s like they’re buying a used car and trying not to get a lemon. The real money is made in the strategy of what type of home you should buy with your individual budget and your individual goals, even if that means maybe you don’t buy. Even though you are told yes, you can buy, maybe you want to wait another six months to make sure you’re buying in the right tier of homes for you.

Now I know some of you are dying for more information on the home inspection. I gave that to you too. Episode 322, 220 and 110 and 75. I cannot stress this enough. If you don’t trust your professional real estate support team, by the time you’re getting to the place where you’re writing offers or doing inspections and you feel the need to go ask Reddit about a crack in the wall or something that you don’t understand, then, unfortunately, you have spent your research time on the wrong things.

That’s why when I’m answering this question, I’m saying, “Go grab a great support team and they can help you figure out what the best house is for you and they can help you avoid all the red flags instead of always buy this kind of house. Never buy this kind of house.” It’s so different for everyone and you’re going to miss so many options.

Now that I’ve stressed and stressed that point, the moral of the story and figuring out what kind of home is best for you is don’t stress out. You don’t have to have it all mapped out before you get in the car and start looking at homes. That’s the point. You don’t have to know everything. You want to go out and see and explore. I know you think you found everything online, but you might find a bunch of stuff out there that was a complete surprise to you. During that period, when you’re doing your research, you don’t have to do that on your own. Just find the right team who are going to help evaluate where you are now and then work a plan, giving you the professional guidance that is actually listening to you.

They’re going to help craft all your home-buying options that are going to help you find not only the best place to live, but someplace you can build a life. Your first dream home might be just the launching pad to a whole bunch of different ideas. It might be a launching pad and you buy a home that you might call a stepping stone. With the right team, what might start out as confusion about the whole process is going to turn into confidence. Get after it and get into your curiosity. Find out what all the possibilities are and then be ready to be flexible. Stay honest about what you want and then let your unicorn lead you to the right fit, not the fantasy.

Your first dream home might just be the launching pad for a whole new set of ideas. It could be a stepping stone—a home that gets you started. With the right team, what begins as confusion about the process can turn into confidence.

Unlocking First-Time Homebuyer Programs & Grants

Okay, now we’re going to go to question number 11 out of the top 20 most frequently asked questions by first-time home buyers on the internet. Are there any first-time home buyer programs or grants that can help me? Quadruple yes. There are absolutely programs, grants and incentives out there for first-time home buyers. They’re not necessarily magic wands that make buying free, but when you find the right wands, they can be game changers.

I talk to my audience all the time who are shocked to discover that they qualify for down payment assistance and yeah, even people who make over six figures in the high cost of living areas, you don’t know if you don’t ask. There are a lot of times that I see people leaving money on the table. Just ask because the key about understanding down payment assistance programs is they’re available for many different groups of people. Yes, a lot of them are for people who don’t have a lot of money, need a leg up. What you have to do is get the right people who know where to look and what to ask.

I’m going to start with the basics. In the United States, nearly every state offers some form of first-time home buyer assistance. They include the grants, the second loans with deferred payments, and some of them even have forgivable loans. On the federal level, there are government-backed loans that offer you really favorable terms as well as low down payment options. You’ve got FHA, VA and USDA could be fantastic for folks with lower credit scores or just not a ton to bring in for the down payment.

I say it all the time on the show. FHA, staple in my career, so many first-time home buyers have used it just 3.5% down, in flexible credit requirements. I’ve had someone like Anna in episode 168 leverage some of these options so they could get in the game way earlier than Anna ever thought possible. You’ve got these other hidden gems. State housing finance agencies. NerdWallet and HUD both maintain these lists by each individual state. Some of those programs match your savings or they’ll cover your closing costs or they’ll even just straight up give you free money. Grants.

Heads up. These programs usually require a home buyer education course, which isn’t much education there, folks. Listen to podcasts instead. A lot of these programs do have income or location restrictions like they’re for just for certain areas or you can only make a maximum amount of money. However, it never hurts to ask and find out. If you find out that you do fit into one of those programs, if you’re willing to put in the time, you could shave thousands off your upfront costs. For my friends in Canada, the government will even loan you 5% to 10% of your home’s purchase price to lower your mortgage.

They’ve got something called FHSA, which acts like a hybrid of TFSA and RRSP. Don’t know what that means? You are an American. One of the biggest lessons that I try to teach people about affordability is that it’s about so much more than the sticker price of the home. With that, a good unicorn team is going to know which exact local programs you qualify for and maybe even how to stack them because you can combine multiple down payment assistance programs.

Now, the other big thing about them is they vary from state to state, from county to county, even city to city. Working with that local team is going to be super important because they’re going to be the people that help you and maybe even help you stack them so you can use more than one. I’ve actually had examples of that from interviews on the show.

Not a theory, not fantasy, real life, real people getting real keys. Probably the biggest guidance and advice I can give on this is most people who are wondering about these programs don’t know who to ask. A lot of times, they ask someone who doesn’t really have all the answers. That’s why you need a team that lives and breathes all this first-time home buyer stuff.

If you’re just scrolling on Zillow or talking to your cousin’s golf buddy who dabbles in real estate, there’s a really big chance you can miss the opportunities of assistance that’s there for you. If you plug in early, get educated and connect with a pro, you’re going to unlock tools built specifically to help buyers just like you.

Navigating Fixed Vs. Adjustable-Rate Mortgages

Alright, going on to question twelve. I was surprised this was this high on the list. Should I get a fixed mortgage rate or a variable mortgage, an adjustable rate? This is interesting because a lot of people, this question was off the table for a long time, but now that we’re in this high-interest rate market, people are starting to ask again, “What’s up? Can I just get an adjustable rate and get a lower payment?” Yeah, it’s a hot topic right now for good reason. People are trying to get in. The 7% is not working for everyone.

These adjustable-rate mortgages, an ARM, they call it, they’re starting to look real tempting. Here are the basics on the differences. A fixed-rate mortgage gives you the security of knowing your payment isn’t going to change for 30 years. No surprises. A lot of times, that’s what first-time home buyers want. The certainty, the stability, the sleep at night, peace of mind, especially playing to stay in your home for the long-term.

Now, on the other hand, there are these ARMs, these Adjustable Rate Mortgages, they vary. You’re typically going to get a lower interest rate upfront and then, after a certain number of years, 5 years, 7 years or 10 years, then it adjusts into usually what is a much higher rate. You may have heard people talking about rates ballooning. That’s what that is.

That can work if you know you’re going to be in the home for a short period, well below whatever period, 5, 7 or 10 years that you get on your arm or if you are just totally certain that interest rates are going to drop and you’re going to refinance out of it into a 30-year fixed at a lower rate later on. The main thing about these is don’t look at a variable rate mortgage as a simple regular option that you should try to compare apples to apples.

It’s not something that you should dabble in. This isn’t a cool grocery store club card discount. “You mean I just do this and I get a way lower rate for the first five years? Awesome.” Now usually, I like to tell people that they’re for serious players who totally comprehend the big math. There are a lot of different ways you can look at it. If you’re planning on a quick move or you really are sure those rates are going to drop, okay, but it’s still a gamble unless you have a clear exit plan or, most importantly, the financial cushion to handle a potential increase.

If you’re wrestling with this decision, tell yourself this, “Can I look at my first home purchase like an investor or am I going to be completely invested in this home because I live in it?” More wordplay. Got it? I had one couple that was considering an ARM, but ultimately, they went with the fixed rate because their unicorn team helped them understand that the short-term savings of the ARM, for them, based on what they had talked about, it didn’t outweigh the long-term risk.

Another one locked into a fixed rate, even though they were really attracted to the lower rates of the arms because they wanted predictability. It comes down to you and your personal style. Are you a gambler? Are you someone who can treat your first home like an investment and your own personal risk tolerance? If you’re the type who loses sleep over all those what-ifs, then I would head back and just grab that fixed rate and you’ll be comfortable and happy as you move forward.

A good unicorn lender is going to run the numbers for you both ways. They’re going to help you look at historical data as well as projecting different scenarios. They’re going to ask questions like, “How long are you going to stay here? What happens if rates go up?” That’s the difference between the two. The only person who could figure out the answer of what’s best for you is you. Just don’t make that call on your own without a professional by your side.

Mastering Negotiation & Competitive Offers In Bidding Wars

Alright, question thirteen. How do I negotiate the price and make a competitive offer? This one I’ve heard so many times in my career and it boggles my mind how many people think, “There’s like one little trick you can tell me that the other realtors don’t know. You’ve been doing this well, David. Tell me that trick that got that buyer you worked with last year who’s my coworker. What was that trick?”

Okay, yes, there are some tricks that I’ve used over and over again that make your offer look more attractive. The thing about negotiating a price is that you’re dealing with one seller who’s selling a home one time and couldn’t give more than one darn about you. There’s no manager that you can complain to afterwards because you got horrible customer service when you were trying to buy this.

It’s the Wild West. They can handle their sale of their home any way they want. Yes, there are tricks that work usually, but I say usually because that depends on the sanity of the seller. Sometimes, those tricks don’t work with certain people and sometimes they’re unrealistic and sometimes they’re just plain nuts. When you’re getting ready to write your offer, I know that it feels like you want the comfort of some formula that works because that’s going to help you decide, “Based on this price, in these comps in this neighborhood, well then my counteroffer in this bidding war should be X.”

It all makes sense because you’ve done your homework, you’ve crunched the numbers. You’ve toured a whole bunch of homes, and now you’re staring down that moment where either it’s your first offer or a counteroffer and whatever number you pick, you realize that’s going to land your dream home or you’re going to lose that dream home and someone else is going to get it. Someone faster with their offer, someone richer or someone bolder.

I know a lot of you are bummed out about this, but the truth is, with this low inventory, you need to embrace and mentally prepare yourself for the bidding wars more than ever. In ‘25 and ‘26, it’s going to be part of the home-buying process. What I can offer you is some hope, some things that have worked when the transaction and the negotiations ended up being in the realm of normalcy.

With low inventory, you need to embrace and mentally prepare for bidding wars more than ever. In 2025 and 2026, they’ll be part of the home-buying process.

There are hundreds of success stories and interviews with the homies. One thing we figured out was that success comes from being prepared, having some of these tips and tricks that I can tell you about and then adjusting those with the correct strategy for the individual seller. Episodes 175, 176, and 177 are entirely dedicated to the negotiations and as well as getting deeper into bidding wars.

I’m going to break down how we had many buyers that were winning even in the hottest of markets. One of the things I tell everyone is don’t get paralyzed by fear of competition. Instead, use that strategically. There’s one tip I talk about called an escalation clause, where in your counteroffer, you’re saying, “We’re going to offer you this, but we will automatically increase to a certain limit if you get other offers in the bidding war.” We show you how that was used effectively and help buyers land their dream home.

Here’s the thing about bidding wars. That’s a clause that’s based purely on, “Mr. Seller, I’m going to give you the most money, but you know what, we’ve won bidding wars a lot without offering the most money.’ you can win by being the strongest overall offer that includes price and the terms of the deal. You need a team that can really break down all the terms for you.

You’ve got to make sure that you are pre-approved, not just pre-qualified. You have to understand what’s important to the seller, like maybe a fast close or flexibility on the move out, like they might need to stay a little bit longer. Your unicorn realtor can help gather all that intel and then they’ll craft your order and your offer and your counteroffers and then they’ll craft your offer and your counteroffers accordingly.

I’ve had homies win bidding wars because the agent talked to the listing agent and they figured out the sellers were prioritizing the convenience of the move over price. Since there were multiple people coming in at pretty much the same price, what those buyers did is they offered a 30-day rent back after closing and they got the house even though their price wasn’t the highest bid.

That’s an important lesson for you all. Real estate is about time and money. If you want to save the most money, be ready to be flexible on time. Be a buyer that can close in 15 days or be a buyer that can extend a contract for 3 months out. This takes preparation. The big dollars are saved six months before you ever negotiate the contract. You hear that a lot. People say, “You make the most money in real estate is way before you do the deal.” It’s true.

The negotiations to support and have the right team with you, but if you find your power early and you do your best to create all the flexibility with your time and your money, then you’re going to be the bigger winner. A great example comes from a listener featured in one of the episodes. They initially wanted to offer $15,000 below the list price because they were nervous about overpaying.

However, their unicorn realtor helped them realize that comparable homes in that neighborhood had been going for well over the asking price. They wanted to go $15,000 below. If they wanted a shot, they’d have to be competitive. They offered just slightly over the asking price. What they did was they had really killer terms. There were no unnecessary contingencies. They shortened the period of their contingencies and they offered a very fast close to the buyer. Guess what? They got the house. The house appraised exactly at the level that they purchased it at, so they knew they didn’t overpay.

Another tip for your negotiation is something that you also do ahead of time. Don’t fall in love with a home and write an offer based on your emotions. If you haven’t done the research, then don’t let your emotions take the lead. Make sure you’re looking at recent sales at neighborhood trends, at the days on market for homes in that neighborhood as well as the days on market for the home you’re writing an offer on.

If that home that you’re writing an offer on has been sitting on the market for weeks, well then, you might have more negotiating power. If it’s a fresh listing in a really hot zip code, you have to assume there’s going to be multiple people coming in and you have to come in strong. Ultimately, the best way to navigate your offer strategy is with having an experience guide. This is not HGTV. I could go on for hours about such BS with the negotiation and deciding what offer. You realize that a lot of people already own the home that they go into and pretend like they’re looking at it the first time. It’s ridiculous.

Here in the real world, it’s about having a killer guide and using every tool available from financing to your flexibility in the inspection process, to the closing terms, to crafting the most attractive offer for the specific needs of the seller. No matter how much research you do on your own, the unicorn realtor, your experienced realtor who negotiates these things every single day, will know all the ins and outs of the options.

Most importantly, they’re going to know what’s happening right now in the market, what’s working and what isn’t. What your uncle did six months ago, it might not even be an option now, let alone be an option that will work for you. It sucks, but there’s no manual, there’s no instructions, there’s no playbook on this. You just need to have someone who’s been through it before and most importantly, been through it yesterday and last week. It could be a little bit of the luck of the draw because, homies, sellers be crazy.

No matter how much research you do on your own, your unicorn realtor—an experienced professional who negotiates these deals every day—will know all the ins and outs. Most importantly, they’ll know what’s happening in the market right now: what’s working and what isn’t.

The Power Of “Total Math” & Long-Term Wealth Building

That’s enough to digest in this section of the series. If you’ve got more questions, go to HowToBuyAHome.com. Ask me your question directly and I will answer you or you can ask me for your local unicorn hookup. We can do that too. Be sure you check out the How to Buy a Home YouTube for more insights with visual aids.

Please, if you have a minute, drop me a written review on Spotify or Apple. If you’re getting anything about all this information, reviews for the show is the way that we grow and we want to keep this revolution going. We’re starting to see things swing in the direction of first-time home buyers. People are starting to not only recognize you but also find ways to help you get more power. Let’s do it. Power to the people. You can do this.

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About the author

David Sidoni is the host of the How to Buy a Home Podcast and a nationally recognized real estate educator for first-time buyers. With over 4,100 real-life success stories, David has spent more than a decade helping renters break the cycle and become confident, prepared homeowners. His honest, myth-busting advice has made him one of the most trusted voices in the homebuying space.

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