You finally found your dream home after weeks or months of searching. You put an offer in and you’re already picturing yourself eating dinner in the dining room and hanging out by the pool. Suddenly, a notification from the seller dashes all your dreams: Your offer was rejected.
What? How? Why? This is the perfect home for you and your family; how could the seller not see that? Not to mention you took the time to craft a perfect offer letter in the first place.
The truth is, the most variable factor in the home buying and selling process are the humans doing the buying and selling – the unexpected can always happen. Let’s take a closer look at the reasons why purchase offers are rejected, and what your options are from there.
Why was my House Offer Letter Rejected?
Your Offer was Too Low
Everyone wants to save a bit of money when buying a home, which is understandable; purchasing a home is a huge investment! That being said, trying to keep a little change in your pocket could actually end up costing you.
While you might view your offer letter as a strategic way to get the home of your dreams at a reduced cost, the seller could see your lowball offer as devaluing their home. They’ve invested time and money into building this home, and likely, they want it to go to someone who will appreciate that effort.
Your Offer was Too High
I know, I know – it’s starting to sound like Goldilocks and the Three Bears around here. But an incredibly high offer sends off little red flags in the seller’s mind. Why? Because any lender is going to require an appraisal, and if they find the value less than what you’ve offered to pay, they’re going to put a pause on your approval for financing.
Want to offer well above listing price and ensure it’s accepted? It’s significantly more likely to happen if your offer is all in cash.
You Had Too Many Contingencies
Okay, but if you get the dollar amount “just right,” why would they still say no? A common reason is a seller being spooked by too many contingencies. These what-if clauses within the purchase agreement are intended to safeguard you, the buyer, from any unsavory information that comes up along the way, but they also communicate hesitancy to the seller. Make sure each contingency present is absolutely necessary before sending your purchase offer.
You Didn’t Meet Requirements You Didn’t Know Existed
This one is tricky. Essentially, some builders might have a certain buyer in mind when they put a house on the market. That might include specific mortgage lenders they favor, a certain earnest deposit amount they want to see, or a closing date they’re looking for based on their timeline and pressures. The hard part is this information might not be explicitly spelled out.
This is typically where having an agent comes in handy, as they can reach out to the seller’s agent to get a feel for any of these parameters and help guide you in the right direction.
There’s a Competing Offer
If you’re in love with a home, it’s likely someone else is as well. If you and another buyer placed an offer at the exact same time, the seller is going to look at risk factors and consider which offer they like better. For instance, you might offer a higher earnest deposit, but the other buyer is offering to close on a quicker timeline. Whichever is more important to the seller is the offer that’s going to be accepted.
This is par for the course when searching for a new home; it’s best to have multiple homes in mind when you’re deciding where you might live, so if another buyer gets to one first, you’re not starting from ground zero.
It’s Not Them, It’s You
As mentioned at the top, success in the home buying and selling process has a lot to do with the people involved. If you and a seller have hit it off – whether it’s due to similar interests and motivations, or just maintaining professionalism in all your interactions – they’re going to have an overall positive response to seeing your offer. On the other hand, if you and the seller don’t see eye to eye and personalities clash, they’re likely not going to be rooting for you.
Keep in mind agents also affect this. While most understand the real estate industry is built on relationships, some may not connect well with other agents. These minor differences in character can cause rifts down the line.
So What Can I do When My Offer Letter is Rejected?
Essentially it comes down to two paths: You can make a new offer and continue to pursue this home, or shift your search elsewhere.
Making a New Offer
Take a close look at your original offer. Did the seller indicate why your offer was rejected, and if not, can you suss it out yourself? Perhaps it was due to one or more of the reasons listed above. Did you lowball your offer, and request multiple contingencies? Or maybe all of the interactions between you and the seller have been awkward and forced.
Regardless, your first step is to determine why the letter was rejected, and then deciding if and how you can change that part of the letter. A few questions to ask yourself are:
- Can I increase my offer?
- Are all the listed contingencies absolutely necessary?
- Can my closing date be adjusted to meet their timeline?
- Can I increase my earnest deposit or down payment amount?
- Is there any information I didn’t include in my original offer that would make a difference?
Make adjustments where it’s possible and reasonable, but don’t go overboard: Remember, you still have to deliver on your promises. If you up your offer by $100,000 but can’t back that up, the deal is going to fall through anyway.
Think about adding a personal letter to reiterate why you’re the perfect person to buy this home; maybe you included a prequalification letter from your lender, but a preapproval letter would be more effective. If there are additional details the seller should consider, don’t hesitate to share them!
While none of these tips are guaranteed to change the seller’s mind, they can help. Consider your original offer letter, the resources you have, and ask advice from experts to determine what’s best for your situation.
No matter how in love you are with a home, always know there’s a chance things might not work out. The seller rejects your offer, another buyer places a higher offer, the list goes on. What do we recommend you do in this situation?
Take a little advice from Queen Elsa and let it go, let it go …
All joking aside, she was on to something. No matter how convinced you are a specific home must be yours, some things just aren’t meant to be. This doesn’t mean you’ve lost your chance, though; rather, only that the truly perfect home is still waiting for you.
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