How to win an offer in Denver without overpaying

Denver is not the frenzy it was in 2021, but well-priced homes in neighborhoods like Wash Park, Highland and Park Hill still draw multiple offers in the first week. Buyers who lose those homes usually assume they were outbid. In our experience, about a third of the time the winning offer was not the highest one. It was the one the seller believed would actually close.

Here is how we think about offers, and the six levers you can use besides price.

1. Understand what the seller needs

Before writing an offer, your agent should call the listing agent. The goal is not to fish for the highest bid. It is to learn what matters: a quick close because the sellers already bought, a rent-back because their new home is not ready, or certainty because a previous contract fell apart. A seller who needs 60 days in the home will often choose a slightly lower offer that gives them that time for free.

2. Price from closed sales, not list price

List price is a marketing decision. Value comes from closed sales. We pull every comparable sale from the last 90 days within a tight radius, adjust for size, condition and lot, and compare that to what is pending right now. That gives you a range where the home is likely to appraise, and a ceiling above which you are taking real risk.

When a home is listed below its likely value to create a bidding war, we tell you. When it is listed above, we tell you that too, and we often wait a week.

3. Handle the appraisal question directly

In competitive situations, sellers worry that a strong offer will fall apart when the appraisal comes in low. An appraisal gap clause, where you agree to cover a set amount above the appraised value, can make a lower offer more attractive than a higher one without that protection.

• Only commit to a gap you can cover in cash on top of your down payment.
• Cap the gap at a specific dollar amount, not an open-ended promise.
• Ask your lender how a lower appraisal changes your loan terms before you sign.

4. Use earnest money as a signal

Earnest money in Denver is often 1 percent of the price. Raising it to 2 or 3 percent does not change what you pay at closing, because it is applied to your down payment, but it signals commitment. Sellers read a larger deposit as a buyer less likely to walk away.

5. Keep your inspection, but shorten it

We do not recommend waiving inspections on older homes. A 1920s bungalow can hide a failing sewer line that costs $15,000 to replace. What you can do is shorten the inspection period to five or seven days, schedule the inspector before you submit, and agree to only raise items above a set dollar threshold.

6. Make the closing date easy

Ask the listing agent for the seller's ideal closing date and match it. If the seller needs time after closing, offering a free rent-back for two to four weeks costs you little and can be decisive.

The best offer is not always the highest one. It is the one the seller believes will close.

What this looks like in practice

In July, one of our buyers competed with five other offers on a three-bedroom home in Highland listed at $799,000. The highest offer was $842,000 with a standard inspection and no appraisal protection. Our buyer offered $829,000 with a $20,000 appraisal gap, a seven-day inspection and a two-week rent-back the seller needed. The seller accepted our buyer's offer, and the home appraised at $815,000. Our buyer covered the $14,000 difference and still paid $13,000 less than the top bid (sample scenario).

Before you start touring

Get a full pre-approval, not a pre-qualification. Decide your true ceiling with your lender, including how much cash you could put toward an appraisal gap. And pick an agent who will tell you when not to write an offer. The best buyers we work with lose a home or two, and end up in a better one because they did not stretch for the wrong house.

If you are planning a purchase in the next six months, our Highland office runs a free first-time buyer workshop on the second Tuesday of each month, and any of our buyer's agents can walk through a strategy for your price range.

This article is general information for a demo website and is not legal, tax or financial advice.