If Your Offer is Rejected

Rejection is a common experience among home buyers, especially in areas where home inventory is limited and many buyers are competing for the same homes. Let's take a look at some common reasons for seller rejection, as well as a few things to do (and avoid) in the wake of a rejected offer.

This is likely to be the first question you have for your agent when he breaks the bad news of a rejected offer. So why do offers get rejected?

• Lowballs: Simply put, you offered less money than the seller was willing to accept. If you're intentionally making lowball offers, you should be prepared for a higher risk of rejection. Some sellers are willing to counter a lowball offer, while others may simply refuse to respond.
  
  
• Bidding Wars: The seller may have received bids from multiple buyers. Your agent will let you know if there are other offers on the table, and a good agent will help you with strategies to improve your offer. But just like those auction scenes from the movies, someone just might outspend you.
  
  
• Specific Terms: Maybe your offer amount was fine, but the seller needed some specific conditions to be met. Maybe he wanted to close the deal in half the normal time. Maybe he needed to rent the home from you for three weeks after the closing date, to have enough time to move. If you two couldn't agree to these or other terms, the seller may have gone with an offer from a buyer with more flexible terms.
  
  
• Financing Issues: Even if you're pre-approved for a loan, a seller may have specific financing preferences. This may include an aversion to FHA or VA buyers, or a preference for all-cash buyers who have no chance of being rejected for a loan at the last minute.
  
  
• Seller Weirdness: Sometimes, people are just weird. There's no rational or scientific explanation for some seller rejections. You'll ask your agent why your offer was rejected, and she'll shrug and say "I have no idea." It happens. Maybe the seller got cold feet about selling. Maybe you have the same last name as the kid who took their lunch money in 5th grade.
  
  
• Emotional Attachment: Sellers sometimes don't have the best judgment about the value of their own home. Sometimes a buyer can make a perfectly solid offer, supported by a thorough CMA, solid financial backing, and reasonable terms, and still get rejected. The seller may have an inflated view of the home's value, or may not be able to separate emotional investment from down-to-earth market value.
  
  
• Agent Weirdness: You trust your agent to negotiate on your behalf. It's part of his job. But what if he's a blowhard? What if he's rude, condescending, overly aggressive, late with his paperwork, sloppy, or otherwise unprofessional? Even if you make a solid, competitive offer, you may be rejected if your agent is a clod.

• Do talk to your agent. Ask why the offer was rejected. Usually, the listing agent will give your agent some explanation as to why your offer wasn't selected. Ask questions about the negotiation process. If your agent aggressively trash-talks the seller or listing agent, it might mean that your agent is the one that blew the deal.
  
  
• Do not take it personally. Emotions can run high when you think you've found the one and only house that will ever feel like home. The seller didn't reject your offer out of spite. Remember, sellers have their own bottom line, and need to make decisions in the best interest of their time and financial situation.
  
  
• Do re-evaluate your strategy. Maybe you thought you could waltz into a negotiation, offer way below list price, and come away with the home. It's possible that you misread the market. Or maybe you're overgeneralizing; even in cities where home prices have plummeted, there are always a few neighborhoods where homes prices hold their ground. A good local agent will understand these home price micro-climates. Ask your agent if there's anything you could have done differently (within your comfort zone) to land the home.
  
  
• Don't blindly change strategies. Maybe you are a lowball buyer, or maybe you do have specific conditions that need to be met in order for you to buy a home. Re-evaluating your strategy doesn't mean abandoning it at the first sign of trouble. Maybe you just need to accept that your home purchase will take longer than you expected.
  
  
• Do keep looking. Buying a home can take months. Ideally, you want to find a home before your loan pre-approval expires; usually about 90 days (verify this with your lender). This means taking setbacks in stride and continuing to move forward.
  
  
• Don't get desperate. After multiple rejections, it can be tempting to settle for any home, just because it's actually available. Don't do it. Consider that you might be living in a home for ten years or more. Will you still be glad you settled for a house you never liked much in the first place?
  
  
• Do widen your options. It's possible that homes in your top-choice neighborhood are just out of your price range. If you find yourself getting outbid every time a house you like comes on the market, maybe it's time to consider other neighborhoods or price ranges. You may discover an area that you'd never noticed before, or realize that features that once seemed like necessities aren't so important after all.
  
  
• Do consider waiting it out. The longer a home is on the market, the more willing a seller may be to reconsider your offer. If a seller refuses your initial offer, keep an eye on the listing. If the home is still for sale a month later, ask your agent about reminding the seller about your offer.