Why Your Home Offer Was Rejected
But entering the market and looking for your dream home is just the first step. After you’ve identified a home you love, you’ll need to make an offer.
As you make your way through the buying process, remember that your home offer works both ways: It can help you stand out from other buyers—or lead to a quick rejection from a seller.
A well-made home offer is key to landing your dream home, but a poor offer can end in a definite no. Offers are rejected for many reasons—low-balling and contingencies are just a couple.
Here’s what you need to know to avoid the rejection of your home offer.
Was Your Home Offer Too Low?
Sellers expect a fair price for their home and occasionally base their asking price on emotional attachment to the property. If you make a low-ball offer, the seller isn’t legally bound to answer, but these things might happen:
- An emotionally-attached seller may take a low home offer as a personal insult.
- The seller won’t think you’re serious about buying the home.
- The low offer may irritate the seller into rejection rather than negotiation.
Low Earnest Money Deposits
Don’t try to win the seller over on your heartfelt interest in the property alone. It doesn’t matter how much you love the house if you cannot afford what the seller is asking.
If you are intent on submitting a low home offer, avoid rejection by submitting a substantial earnest money deposit, which can vary from $1,000 to 3% of the sales price.
If your earnest money deposit is lower than this, you won’t seem like a serious buyer.
The Listing Agent Has Dual-Rate Commission
A listing agreement can keep your offer from acceptance. This is an agreement by the seller’s listing agent to reduce his or her commission on the terms of representing both the buyer and the seller.
If your agent is the one negotiating a home purchase, the seller will end up paying more and receiving less at the end of the sale—which may lead some sellers to wait for another bid.
Seller’s Demands Weren’t Met
Many sellers present special conditions when negotiation a sale. For example, the seller may ask for one of the following:
- For a larger earnest money deposit
- To push back the closing date
- For specific financing terms
- For a pre-approval letter from a lender
A home purchase offer can fall through if the buyer does not fulfill the seller’s terms. However, if you include these into a written home offer, your chances for closing on the house can increase greatly.
Keep Moving Forward
If negotiating a home purchase the first couple of times only ended in disappointment, keep moving forward. Those prospects were obviously meant for someone else.
Surely your dream home is just waiting around the corner. Keep your eyes ahead and try your best the next time around with another home offer.
Read the full article at Realtor.com.