What to do when your offer to purchase a home is denied
When submitting an offer to purchase a home, the seller will respond in one of three ways: they can accept, come back with a counteroffer, or reject your offer completely. If your offer is denied, don’t feel discouraged.
Having an offer rejected is a pretty common occurrence in the home buying process – especially in the current market environment.
But why was the offer rejected? If you’re trying to buy a home during a seller’s market, the seller may be sorting through multiple offers on their house. While you might assume they would simply choose the highest offer, that’s not always true – there are usually many factors involved in their decision.
1. Contingency Issues
A contingent offer can be a great way to protect yourself when making an offer on a property. Mortgage contingencies and inspection contingencies make it easier to walk away from a deal if something goes wrong.
The problem with contingencies is that sellers can be wary of them. If a seller is worried about dealing with potential repairs or concerned that your contingencies may delay the sale of their home, they might choose a non contingent offer even if it isn’t as strong otherwise. In seller’s markets, sales move quickly; if the seller is looking to move out and move on, contingencies can appear lackluster in accordance to their timeline. Effectively, the shorter the contingencies, the more attractive the offer will appear to the seller.
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The problem with contingencies is that sellers can be wary of them.
2. Finance Issues
If your offer came in lower than others or you didn’t meet certain financing requirements, a seller is likely to turn your offer down. To avoid your offer being rejected for financial reasons, it’s important to have a strong pre-approval ready. Getting pre-approved is an important step to take because it proves to sellers that you are financially prepared and that you can buy their house. Moreso, it is vital to have a reputable mortgage lender prepare your pre-approval letter, as that is another variable that is also taken into consideration when realtors are guiding their sellers on choosing an offer to accept.
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Everyone has a different schedule to manage. Many sellers will understand that and work to find a closing date that works for both parties.
3. Closing Date Issues
Everyone has a different schedule to manage. Many sellers will understand that and work to find a closing date that works for both parties. Others, however, will view a difference in closing date preferences as an easy road to a rejected offer. Some sellers may have their own strict timeline to work with and if it doesn’t match up with yours, they may be unwilling to consider your offer. If there is any wiggle room in your schedule, it’s important to be completely transparent and let your agent know so they can better negotiate.
If your offer was rejected without a counteroffer, it might be best to move on and keep looking, though you can potentially have your agent inquire as to why the offer was denied if you’d like to know how to improve your offers in the future.
While it can be easy to feel disappointed that you won’t be able to buy a house that you loved, remember that there are always other homes out there and that, in an extremely competitive and unpredictable market, rejection is oftentimes part of the journey.
If you want to learn how you can put your best foot forward in your search for a new home, give us a call at (1) 305-851-5225 and one of our loan officers will be happy to get you started on the right path.
This article was originally published by Anna Ritchter in BlueFire Mortgage