Many new writers (and some experienced ones) approach the synopsis grudgingly and with a certain dread. Many times it is left as the last task to do after the manuscript is completed, and is only attempted because an editor or agent has requested one. If that's your attitude, try to cultivate a better one. A synopsis can be a great help in two respects: as a road map and as a sales tool.
If you were planning a driving trip across the US, your personality would dictate how you'd set out. If you were a meticulous planner, you'd have a large number of maps, both broad and detailed, and mark your route with orange marker. You'd have all the hotel stops and sights to see marked out, and you'd have that 30,000 mile service done on your car a couple of weeks in advance. All your hotel reservations would be lined up in a row, and you might even have a daily schedule. A more relaxed traveler might get a USA map, study it the day before the trip, and have a general idea how many miles to traverse each day. The free spirited traveler would wake up one morning, hop in the car, and decide whether to drive east or west.
Writing a novel is a lot like taking a long trip and the synopsis is your trip planner. You're aiming for the middle of the spectrum, the relaxed traveler. A synopsis should be your road map, but not constrain you so that you have no creative freedom along the way. There should be plenty of opportunities to get off the Interstates and mellow out on the country roads.
When you've got an idea that you think can be developed at novel length, start by writing a one-paragraph summary. If you can't put your idea clearly into a single paragraph, you've still got some thinking to do. Then expand it to a page, then to five or six pages. Write in the present tense. This takes some practice, but that's the way a synopsis is generally written. Think of it as sitting across from someone in a social situation and telling your story aloud, in an exciting fashion. Introduce each of your major characters as they enter the story with a paragraph or two. No dialogue. No juicy subplots. Just the bare bones of the story. Remember that if you are going to end up with a 400-page manuscript, each of your five synopsis pages has to cover 80 pages of manuscript! Don't try for a chapter-by-chapter breakdown, unless you want to do that later on as a working tool for yourself.
Polish your synopsis carefully, and let your writing style show. By this I mean use the same tone as you intend for your novel. If you are writing a dark, suspenseful, graphically violent novel, don't write your synopsis with prose that is the equivalent of smiley faces. If you are writing light or humorous material, let the synopsis reflect that. This is important because it helps you get things clear in your own mind, and it presents your book to an agent or editor accurately.
When you are working on the manuscript, use your synopsis as a guide. Develop all those characters and subplots, put in all the rich descriptions. Let your characters make decisions and take the lead, if that's your way of writing. But if you are going to deviate from the bare bones story in your synopsis, you should stop and consider where you're taking the story. Rewrite the synopsis from that point forward if necessary. It is a lot easier to rewrite five or ten pages to see how your new idea will play out all the way to the resolution than to invest the time to write a hundred pages of new material and find out you've plotted yourself into a dead end or sent your character into never-never land.
Don't consider the synopsis as a document carved in stone. By the time you complete the manuscript, your novel should be clearly recognizable as the story in your synopsis, but you've taken many liberties on the way from Point A to Point B.
Suppose you start out with an idea that is burning your fingers and characters that are leaping out of your head. Should you stop the flood of creativity and write a synopsis? No! Go right ahead and get down as much as you can, even if some of it is (well, let's be kind) less than sparkling. Sooner or later you'll come to a point when the rush of words slows down and you start to get that lost feeling. Maybe you're 20,000 words in and can't figure out what comes next. That's the time to back up and write the synopsis. Don't press on and get so discouraged that you never finish the book.
Generally a first time novelist needs a completed manuscript to make a sale. When you've got a track record, though, you may be able to get a contract based upon a synopsis and the first 50-75 pages of the manuscript. The synopsis becomes not only a practical day-to-day guide in your writing, but your sales tool as well. You'll be submitting it to publishers directly, or your agent will be shopping it around, while you are finishing the book. Don't be coy in your synopsis and stop before you get to the end of the story. This doesn't tantalize agents or editors, it irritates them and brands you as unprofessional. Agents need all the information they can get about your novel to make their decision, and that means give it your best shot and don't dribble out pieces of the story.
If you sell on the basis of a synopsis and later want to make a major change as the book develops, you should discuss it with your editor. That's the professional thing to do. I'm not talking about subplot changes or minor developments, but if your killer turns out to be a different person from the one in the synopsis, don't spring it on your editor. No editor wants a manuscript dropped on her desk six months after the contract was signed that bears no resemblance to what was purchased, even if you think the change is an improvement. You'll have to justify a change that affects the flow of the entire book, and get feedback on it from your editor. You, your agent, and your editor form a team to send your book out into stores in the best possible shape. You don't hold back with your teammates.
So what happens if you've already written your book and now have to write a synopsis because an agent or editor wants to see one? It's basically the same process as above. Start with a one paragraph description, expand to a page, then to five to ten pages. The disadvantage to you in this case is that you haven't been able to take advantage of the roadmap concept when writing your novel.
Remember that in any synopsis, written pre- or post-book, you have to hit the high points of your story. It's like skipping across the snow-covered tops of a mountain range instead of traveling up and down every valley between them. Make the synopsis an exciting read in itself rather than he did this, then she did that, and as a result he did this. The synopsis has to engage the reader and make him or her see the possibilities in all those valleys.