Rejected? Understand Why Your Purchase Offer Was Turned Down
It can be maddening to be turned down by a seller for a home. Often, you have your heart set on a particular home and make what you thought was a great and fair offer, only to be rejected. It can be difficult to determine why your offer was not accepted. There are no laws, rules, or even common practices that force a seller or a real estate agent into revealing a reason for the rejection. You can, however, ask the agent and often they can tell you what they know about the situation. For example, even if your offer was very near the list price, a more aggressive buyer may have offered more than the asking price at the same time your offer was made. While a higher offer is probably the most common reason for an offer rejection, there are others and it pays to know about them so you can avoid getting turned down again. Read on to learn about some common reasons that sellers turn down offers.
Financing Issues – If you have begun to search for and make offers on homes without speaking to a lender, you can expect to have problems. Sellers are extremely interested in the buyer's financing situation and may reject those who do not have a loan preapproval when they make their offer. Sellers reason that a buyer who can show proof of being able to either get a loan or to pay cash are better able to close on the deal. Unless you can offer cash for the home, speak to a lender about being preapproved for a loan before you even visit a single open house. The process involves a credit check and a quick evaluation of your budget and income situation. The result is a price range between which you can search.
Offer Issues – Sellers can be emotional about a home they've lived in and can easily be insulted by what they consider a low offer. This can happen even when you are the only offer in sight. As long as your offer was based on comparable sales prices on similar homes in the same area, your offer is legitimate. In some market situations, however, even offers at market price can be turned down if there is a lot of competition for homes.
Concessions – Anytime a buyer asks the seller to pay a closing cost or make certain improvements on the home as part of the contract, that is a concession. Buyers are not fond of concessions for obvious reasons — it costs them money and reduces their profit on the sale. Be very careful about asking for concessions when dealing with a hot market situation. Save them for homes that have been on the market for a long time or when the market is slow.
When your offer is rejected, some sellers counter with their own offer. Unfortunately, that may not happen in all instances and some sellers want more for their property than you want to pay. Speak to your real estate agent about ensuring that your offer is the one the seller chooses.
For more information on buying residential property, contact a real estate agent.