Top Five Reasons Your Offer Was Rejected
You found your dream house! But the sellers rejected your offer. What gives? Here are the five most likely reasons your offer was rejected.
1) Your Offer Price Was Too Low
If you submitted a low-ball offer (in other words, below recent comparable sales) sellers were likely insulted and chose to reject your offer outright. If your offer was reasonable but still under list price, the sellers were probably expecting a full price or even above-list offer.
2) Your Terms Were Not Desirable
Contract terms — other than price — can certainly cause sellers to reject your offer. If you have included a home sale contingency or requested a lengthy escrow period, the seller may reject your offer outright. Asking for closing cost help can also derail an offer, as these seller concessions essentially eat into the sellers’ proceeds (profits!) from the sale. You may also lose out because of rentback terms (or lack thereof). You can read more about all of the contract terms here.
3) You’re Not Pre-Approved
No surprise here. Sellers will not even look at an offer that does not come with a pre-approval letter (you will also be hard pressed to find a buyer’s agent that will submit such an offer for you). All you need is a brief call or meeting with a lender to get what you need.
4) You Submitted Too Soon
If you are writing on a hot property and jump the gun by submitting an offer on the first day, you may think you are improving your odds of getting the house. In these cases, listing agents and sellers are expecting multiple offers and will set a deadline for reviewing them (usually the Sunday night or Monday morning after the home’s first weekend on the market). Your agent should ask the listing agent if there is an offer deadline and if so, make sure you stick to it. If you submit too early, sellers will very likely reject your offer, expecting other offers to come at the deadline.
5) You Lost to a Better Offer
Your offer price may be the same as competing offers. So what happened? Other offers may have more desirable terms and easily beat yours (cash deal vs. financed, quicker settlement, etc). Read more about how to win in a multiple offer situation and what happens behind the scenes when there’s competing offers.
THE BOTTOM LINE
As always, your best strategy for ensuring your offer is accepted is to do your homework – know the local market, including the comps, and know when to walk away (do not go out of your financial comfort zone!).
If you are having trouble landing your dream home or want to talk about the reasons your offer was rejected, please reach out. We’ve helped hundreds and hundreds of buyers submit winning offers and would love to help you too.
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