Few things are as frustrating to home buyers as working hard to come up with a dynamite offer only to have it rejected. Multiple rejections can leave buyers dispirited and disillusioned. But they do not have to. If you have experienced this before, understanding the most common reasons behind offer rejections could help you change the game next time around.
Agents at CityHome Collective in Salt Lake City, Utah say that there are as many reasons for offer rejection as there are sellers who do the rejecting. However, they do say that some reasons are more common than others. Below are four such reasons CityHome Collective agents see all the time.
1. You Are Preapproved for Financing
Back in the day, there was no such thing as mortgage preapproval. Now that it is on the table, preapproval is critical to getting an offer accepted. Sellers do not want to accept offers contingent on mortgage approval if they don’t have to. They do not need the uncertainty. So a buyer who isn’t particularly motivated is probably not going to jump on your offer if you don’t have preapproval.
Bear in mind that mortgage preapproval is actually contingent itself. The house you choose has to be appraised. It has to be inspected as well. And of course, lenders will not go through the actual process of underwriting a mortgage until you have a piece of property to show them. Nonetheless, preapproval tells sellers that you are qualified to purchase.
2. You Want Too Many Concessions
Concessions are a big deal in a buyer’s market. In such a market, buyers know they have the upper hand because there are other houses to look at. But in a seller’s market, the tables are turned. Demanding too many concessions in a seller’s market virtually guarantees rejection. Sellers know that other buyers will be along in due course.
Real estate brokers generally recommended that buyers go in with the cleanest possible offer in a seller’s market. If certain concessions are matters of preference rather than critical needs, skip them. Otherwise, you might be facing immediate rejection.
3. You Are Unwilling to Negotiate
It is not unusual for sellers to ask more than what they think they can get. They do so for the simple fact that they plan to negotiate with buyers. If there is any indication that you are not willing to negotiate, a seller may not waste his time on your offer. The obvious solution to this problem is to plan on negotiating from the outset. With this mindset, you can go in low. Then you and the seller can negotiate a price somewhere in the middle.
4. Your Timeline Doesn’t Work
Finally, buying and selling residential real estate relies heavily on timing. Perhaps the seller needs 90 days to close because he is working on another property himself. If your offer has a 60-day window and you are unwilling to flex, the seller may have no choice but to reject it.
The other side of that coin is requesting 90 days to close after the seller has already moved out. The seller might be looking for a quick sale and immediate occupancy just to get the house off his hands. If you cannot move any quicker than 90 days, your offer might be off the table.
Having an offer rejected is certainly not the end of the world. But it should be a motivation to try to learn what went wrong. The more you learn about each offer you make, the more you are preparing yourself to make the perfect offer when the next house comes up.