OK, we all know it happens. You make what you think is a fair offer on a home and the seller counter, or even worse, they reject it! Why did they do that? What was wrong with your offer? Let’s look at some reasons why your offer didn’t get accepted.
The Price Was Too Low
The most common reason why an offer for a house is rejected is that the price offered is too low. The seller may have a higher expectation of the property’s value or may have received other offers that were more attractive. If your offer was flat out rejected then the seller probably saw it as a “low-ball” offer. Normally if it’s in the ball park of what they will accept they will give you a counter offer instead.
There Were Contingencies
If the buyer’s offer contains too many contingencies, such as the sale of another property or financing, the seller may choose to reject the offer as it introduces too much uncertainty and risk. A home sale contingency may lock a house under contract for weeks or months and the seller has to wait it out with no certainty that the contract will work out.
The Contract Terms Are Not Quite Right
The terms of the offer, such as the closing date or the amount of earnest money offered, may not be acceptable to the seller. If there is a time crunch for the seller that closing date becomes the MOST important thing.
Emotions
Sometimes, the decision to accept or reject an offer can be influenced by emotional factors, such as a sentimental attachment to the property or a negative impression of the buyer. Always do your best to be respectful of the seller and try not to belittle their home. After all it is still their home no matter how much work that needs done or what condition the home is in.
Too Much Competition
In a highly competitive market where there are multiple offers on the property, the seller may choose a different offer that is more favorable to them, even if the rejected offer was reasonable. A cash offer will often beat an offer with a financing contingency as cash offers are seen as more reliable. Maybe an offer came in a lot higher or included an escalator clause that made it more favorable.
How do you Overcome These Issues?
To overcome a rejection before it actually happens you need great communication. Your real estate agent should be able to give the seller’s agent a call and find out the seller’s needs. Normally the seller’s agent won’t tell you what the seller will accept for a price but if a closing date, items that convey, or other terms are important to the seller you can learn what these are. Then you can negotiate around those things.
Always seek to understand what the seller’s motivation is for selling, then craft your offer with it in mind.
Even if your offer wasn’t accepted the first time there could be a second opportunity. The key is to communicate and come together with an agreement that suits both parties.