Bryan puts his house on the market, and Alex and Karen fall in love with it. It has everything they were looking for in a single-family home—a nice yard, well-preserved Craftsman architecture, and enough room for the kids.

The original price:
Bryan has listed the house at $310,000. Alex and Karen's real estate agent thinks that's a bit high for the neighborhood, but the house is in great condition. It's also more than Alex and Karen want to spend.

The offer:
Alex and Karen’s real estate agent helps them craft a letter that states an offer of $290,000. They make it clear how much they love the house, describe their plans to raise a family there, and mention the home quilting business that they want to start. Their agent delivers the letter to Bryan's agent.

The counteroffer:
Bryan receives one other offer for the house, an offer for $295,000. But the house has sentimental value to him—his family has owned it for two generations. Working with his agent, Bryan makes a counteroffer of $305,000, and offers to pay for the home warranty for a year.

The new offer:
Alex and Karen take a hard look at what they can truly afford, and decide they can't safely afford the payments on more than $295,000, given the interest rates available. Working with their agent, they craft a new offer letter that says $295,000 is their limit, but they agree to cover the one-time cost of extermination, which the house will likely need. They of course make it clear that this is contingent on the house passing inspection.