Offer to Buy an Asset: Types and Examples

Key takeaways
* An offer is a conditional proposal to buy or sell an asset that becomes legally binding if accepted.
* Offers vary by purpose and form — e.g., real estate purchase offers, securities offerings, tender offers, and employment offers — and differ in pricing, time limits, and conditions.
* Important features of offers include clear terms, a defined acceptance method, and any conditions or deadlines.

What is an offer?

An offer is a clear proposal to sell or buy a specific asset on specified terms. It sets out material terms (price, quantity, timing, and any conditions) so a reasonable person can understand how to accept. Once accepted according to the offer’s terms, a binding contract is typically formed.

How offers work

• Terms must be definite enough to enable acceptance and performance.
• Offers can include conditions (financing, inspection, regulatory approval) that must be satisfied before the contract becomes binding.
• Offers often include an expiration date or a limited acceptance period.
• A counteroffer rejects the original offer and creates a new proposal; acceptance must mirror the offer’s terms to create a contract.
• Offers may be revoked before acceptance unless they are irrevocable by agreement (for example, through a deposit, option contract, or statutory rule).

Common examples

Real estate offers
* A prospective buyer submits a written offer specifying price, contingencies (e.g., financing, inspection), closing date, and deposit. If the seller accepts, the parties generally enter a binding purchase contract.

Equity and debt offerings
* The offering price is the price at which securities are sold to the public or to investors by an underwriter. For IPOs, the offer price aims to balance investor demand and the issuer’s capital-raising goals.

Tender offers
* A tender offer is a public proposal to buy shares or debt of a company at a specified price during a set period, typically used in takeovers or buybacks. Shareholders may tender (sell) their holdings under the stated terms.

Employment offers
* An employer’s offer to a candidate sets out compensation, benefits, start date, and other incentives (e.g., sign-on bonus, restricted stock units). Acceptance typically creates an employment agreement subject to any conditions (background checks, visa approval).

Other types of offers

• Conditional offer — acceptance is subject to specified conditions (e.g., financing approval).
• Open offer — an offer made to a broad group of holders (often used in securities contexts).
• Subject-to offer — the contract is contingent on specific events (inspection, sale of buyer’s current home).
• Entitlement offer — a pro rata securities offer to an existing shareholder base.
• Tender offer — see above; a targeted public offer to purchase securities.

Practical tips

• Put offers in writing and include clear deadlines and conditions.
• Read and understand any contingencies; they determine whether the deal becomes binding.
• When negotiating, be aware that counteroffers modify or terminate the original offer.
• Consult legal or financial advisors for complex transactions (securities, mergers, conditional sales).

Conclusion

An offer is the foundational step in many transactions. Knowing the type of offer, its required terms, and any attached conditions helps parties negotiate effectively and understand when a binding contract will arise.