Real Estate News & Market Insights:
- Low earnest money deposit: A deposit under 1% to 3% suggests the buyer may not be fully committed.
- Weak or questionable financing: Lack of solid preapproval or unfamiliar lenders increases risk of deal collapse.
- Excessive contingencies: Home-sale contingencies or unusual terms create delays and uncertainty without a kick-out clause.
- Sloppy or incomplete paperwork: Missing signatures, vague terms, or inconsistencies can cause delays or cancel the deal.
Key takeaways
- Not all offers are equal — know what to question before you accept.
- Weak deposits, excessive contingencies, or poor financing can derail your sale.
- A Redfin real estate agent can help you evaluate buyer strength and avoid risky deals.
Selling your home should be exciting, not stressful. But not all offers are created equal. According to the National Association of Realtors, 11% of home sales encounter at least one delay, most often tied to financing or appraisal issues. Knowing what to look for in an offer can save you time, money, and frustration.
Here are seven red flags in an offer on a house that every seller should recognize.
1. Low earnest money deposit
Earnest money shows a buyer is serious. If the deposit is unusually low or missing altogether, it could mean the buyer isn’t fully committed. Serious buyers usually put down 1% to 3% of the purchase price.
2. Virtual buyers who haven’t seen the home
Some buyers make offers without touring the property in person. While this may seem harmless, it can backfire if they change their mind after inspection. Ask your agent how to protect yourself if a virtual buyer submits an offer.
3. Home-sale contingency
A home-sale contingency means the buyer must sell their own property before purchasing yours. This can create delays and uncertainty. If you consider this type of offer, ask about adding a kick-out clause so you can keep your home on the market.
4. Unusually long inspection periods
Standard inspections take about a week. A buyer asking for extra time may be testing the market or stalling for another reason. Longer windows can mean more opportunities for them to walk away.
5. Weak or questionable financing
Financing is the most common reason deals fall through. A strong offer should include a preapproval letter from a reputable lender. Be cautious if the buyer’s financing seems uncertain, comes from an unfamiliar lender, or is dependent on selling another property.
6. Offers above the asking price without appraisal gap coverage
An offer that’s much higher than your asking price may look appealing. But if the home doesn’t appraise at that value, the deal could collapse — unless the buyer is willing to cover the gap in cash.
7. Sloppy or incomplete paperwork
Details matter. An offer with missing signatures, vague terms, or inconsistencies could signal inexperience or lack of organization. Mistakes in contracts can cause delays or even cancel your deal.
Bonus: Seller-side red flags to avoid
It’s not just about the buyer. Sellers can lose strong offers if their own home shows red flags such as mold, pests, or strong odors. Pricing too high can also hurt your chances, leaving your home sitting on the market and losing buyer interest.
Seller checklist: Spotting red flags in offers
Use this quick checklist before accepting an offer:
- Is the earnest money deposit at least 1% to 3%?
- Has the buyer toured the home in person?
- Is there a home-sale contingency, and do you have a kick-out clause?
- Is the inspection period reasonable, around seven days?
- Does the buyer have strong preapproval or verified cash funds?
- Does the offer include appraisal gap coverage if the above list price?
- Is all paperwork complete, signed, and consistent?
FAQs about red flags in an offer on a house
What’s the biggest red flag in an offer on a house?
Financing uncertainty. Without a solid preapproval or proof of funds, the deal is at higher risk of falling through.
Should I always reject offers with contingencies?
No. Standard contingencies such as inspection and appraisal are common. The key is to watch for unusual or excessive ones that give the buyer too much control.
How can a Redfin real estate agent help me spot red flags?
Redfin agents are trained to evaluate offers, verify buyer strength, and guide you through negotiation so you choose the best path forward.
Final thoughts: red flags on an offer from a seller’s perspective
The highest offer isn’t always the best one. By learning to recognize these red flags in an offer on a house, you can avoid delays, minimize risk, and choose the buyer most likely to close. A Redfin agent can guide you step by step and make sure you don’t miss important details.
Explore more seller resources: How to Sell a House With a Realtor, What Happens After a Home Appraisal, and Seller’s Guide.
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