You’ve been searching for a new home for weeks, and you finally found “the one.” You submit an offer and start to daydream about life in your new home. Unfortunately, you get a reply back from your agent saying your offer has been rejected. Though this is a common occurrence, it doesn’t remove the sting. If you’re wondering why your offer was rejected, here are seven common reasons.
Your offer was too low
It’s not unusual for a seller to reject an offer if they feel it was too low. This is especially true if the home just came on the market and you didn’t offer the full listing price. The seller still has plenty of time to see if other, better offers come in that are closer to the price they’re willing to accept. Conversely, even if the home has been on the market for some time, your low-ball offer may not be accepted simply because the seller is insulted. It happens.
You’re not pre-approved for a mortgage
One of the most important things you need to do before you begin searching for a home in earnest is to get pre-approved for a mortgage. Getting pre-approved signals to the seller that you’re a serious buyer. It demonstrates that you’ve been vetted by a lender and will be able to secure financing. In a competitive market, it’s essential that you get pre-approved.
You asked for contingencies
It’s typical for offers to contain contingencies. For example, the sale could be contingent on the home inspection, adequate financing, or sale of your current home. If your offer contains several contingencies for the sale, this could be of great concern to the seller. They may question whether or not you’ll ever make it to the closing table. Even if you offer more money that any other buyers, your offer could be rejected if there are too many contingencies.
Your earnest money deposit was too low
When you make an offer on a home, you will often put down an earnest money deposit once the offer is accepted. This is usually two or three percent of the purchase price, and shows the seller that you are serious about buying the house. This money is held in escrow until closing. If your earnest money deposit offer is lower than what is considered normal, this could cause the seller to reject it.
You requested concessions
Concessions can be anything from asking the seller to pay some of the closing costs to requesting that all the appliances be included in the sale. Concessions can really chip away at what the seller will make on the sale, so it’s not unusual to have your offer rejected because it contains too many concessions.
The seller has unreasonable expectations
We don’t live in a perfect world, and sellers are human just like everyone else. Even if you know that the offer you made was on par with comps in the area, it could still be rejected because the seller has unreasonable expectations about what their home is worth.
Someone made a better offer
Finally, your offer may have been rejected because another buyer put in a better offer. In this case, it’s best to accept that this house wasn’t meant to be yours and continue your search.
Compliments of Virtual Results