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Why Was My Offer Rejected and How to Deal with a Rejected Offer?

Richard Latimer

November 19, 2021

Particularly for first-time buyers, the stress of finding your ideal and perfect home is a hard enough task, but eventually after weeks and months of searching you are ready to put an offer into your dream home.

Then you find out that your offer has been rejected, and naturally all that’s floating through your head is Why, what did I do wrong?

Rejected offers happen frequently and it can cause homebuyers to feel disappointed and can crush the hope of being a homeowner.

However, just because your offer has been rejected doesn’t mean that you have to give up, it’s an opportunity to come back stronger.

The first step to doing this is to understand why your offer was rejected, and usually, it’s a reason involving the money, as well as discovering what options you have from that point onwards.

So, continue reading this blog post to delve deeper into answering the question: Why Was My Offer Rejected and How to Deal with a Rejected Offer?

Why Was My Offer Rejected? 7 Key Reasons

1.     Offer Price was Too Low

Scale Represents That The Offer You Provide Must Be Balanced- For Article Why Was My Offer Rejected
Photo Credits: Pexels.com

Naturally, we all want to save some cash, especially when it comes to purchasing a home as it’s a huge investment. However, just by trying to pocket a little change could be the reason why your offer was rejected.

🔑 Key Fact: It’s important to recognize that in most states, sellers are not obligated to respond to an offer that is lower than their listed price, however an estate agent has to deliver the offer to the seller.

Although you may view your low offer as a strategic route to get the home of your dreams, the seller on the other hand can view your lowball offer as insulting and devaluing their home.

Also, if the property has just been listed, the seller may feel it’s too early to look at offers lower than their original asking price, especially if they have received offers that are around or exceed their asking price.

🧠 Bear in Mind: The seller has invested a lot of money, as well as time into building and decorating their home. So, naturally, they want a good deal and want to sell to someone who is going to appreciate the effort they put in.

2.     Offer Price was Too High

Believe it or not, you can cause your offer to be rejected if your offer price was too high. Offers that drastically exceed the offer price sends red flags to your seller.

Generally, this is because a loan provider or mortgage lender will require an appraisal, meaning they will want to valuate the property to see if the loan amount matches up to the value of the house. If it doesn’t, the loan will be turned down which will potentially lead to a sale falling through.

However, an offer that exceeds the asking price will usually only be accepted if a buyer is willing to buy the property in cash.

👀 Delve Deeper: Are you considering buying a property and paying in cash? Take a look at our blog posts that explore the benefits of buying a property in cash

3.     Competing Offers

There will be multiple different buyers looking at the same house up for sale, and obviously, this is something that is out of each seller's control. You should always have a few homes in mind when you are searching for somewhere to live.

Another buyer's offer may simply be better than another home buyer, for instance, it may have fewer contingencies, or it may just list better terms than what you’re able to provide.

🔥 Hot Tip: If you find your offer is declined because the seller accepted a better offer, you should arrange a meeting with your real estate agent to discuss what changes you can make next time to make a stronger offer.

4.     Didn’t Meet the Sellers Needs

Your hired agent should get in contact with the listing agent to find out if there are any underlying specific requirements that you need to reach.

📝Key Information: Some listing agents will include hints under the agent's remarks section of the Multiple Listing Service- MLS.

Any concerns that you or your agent have should be written into your offer. If your seller requires a long escrow you may be able to offer longer closing date, or you may be able to speed up the closing process if a long escrow is not required.

If you want to delve deeper into the closing process, from the view of either a seller or the buyer, take a look at our blog post.

Other simple requirements may be missed, for example, a seller may want a pre-approval letter from your lender. Most sellers will request a letter; naturally, they will want some proof and assurance that you have been accepted for financing.

💡Extra Tip: Pre-approval loans can also benefit a buyer. It will provide you with an accurate idea of your budget for a property- that way you won’t look at properties or make offers on properties that do not fit inside your price range.

Furthermore, a seller may want a buyer to make an earnest money deposit. Look out for hints as some of these parameters will not be spelled out.

5.     Variable Commission Structure

Variable Commission Structure or Dual-Rate Commission Structure is when a listing company sets up an agreement stating that if the seller's listing agent also ends up working with the buyer, then the agent will lower their commission as they’re earning from both the seller and buyer.

Typically, a listing agent will charge the traditional real estate commission figure, but they may agree to lower the percentage of commission if they can represent the two sides of the transaction. This is commonly referred to as variable rate.

Again, talk to your agent and check through the MLS to figure out if the commission is variable. If it is, the agent may be willing to match the terms for you to get the house.

6.     Contingences

Raising Too Many Contingences Can Defer The Seller
Photo Credits: Pexels.com

Another common reason to consider when questioning why was my offer rejected- is if you raise a load of contingencies.

Contingencies raise alarms for sellers as it displays some sort of hesitancy and wariness. Having too many ‘what-if’ clauses within your written agreement are clearly to safeguard yourself as the buyer from any unexpected information that arises through the process, but always consider what will be going through the seller's head.

Before you write down each contingency be sure that is completely necessary before you send off your finalized purchase offer.

7.     Personal Reasons

The reasons for your offer being rejected sometimes has nothing to do with your offer- and it could be a personal reason. For instance, the seller may believe that you are not a suitable fit for their home, maybe it holds some form of sentimental value to them.

In multiple-offer situations, it will reflect poorly on you as the buyer, if your agent irritates the seller's agent. Sellers are likely to choose a buyer whom their agent suggests.

🚩Be Aware: A listing agent may present two offers of the same value to the seller, and the listing agent can say I prefer ‘buyer one’s agent professionalism over buyer two’s agent’.

How to Deal with a Rejected Offer.

If your offer is rejected, it leaves you with two options:

  1. Make another offer on the house, after you have considered where you may have gone wrong, or
  2. Forget about that property and continue your search elsewhere.

A New Offer:

If you choose to put in a new offer for the property, it's paramount that you spend time analyzing your previous offer letter. Did you put forward an offer that was too low or high or did you raise too many contingencies that scared your seller, or was it something else?

Understanding where you could have potentially gone wrong is the first and most important step an individual can take to gather some idea as to why the letter was rejected.

After you’ve determined the possible reasons, you should figure out how you can change those elements in your letter.

Contemplate asking yourself a few questions such as:

  • Can I increase my offer or in some cases decrease my offer?
  • Can I scrap any of the contingencies I raised? Are they all necessary?
  • Is there any nitty-gritty information I left out of my offer letter, that could have influenced the seller's decision?
  • Can I alter my closing timeline to fit the sellers?

Once you’ve asked yourself the questions below, it's now time to take a look at your original letter and make the appropriate adjustments.

🧠Remember: Always be realistic, do not go over the top. You have to adhere to the information you stated in your offer letter.

You could go the extra mile and add an anecdotal atter explaining why you believe you are the perfect owner for their home. Think about adding a preapproval letter, if you are seeking a loan or mortgage to buy the property, this will provide a sense of security for the seller- the last thing they want is fallen through offers.

These tips are helpful, but they are not guaranteed to change the rejected offer to one that’s accepted.

If Your Offer Was Rejected with a Counteroffer:

Offers can sometimes be rejected and the seller can propose a counteroffer. If this is the case, you should go over the new offer with your agent to figure out if the new terms are suitable for you.

If you find that the offer is unsuitable, then you can move on from the offer and continue your search elsewhere, or you can continue to negotiate with the seller to come to a compromise that works for both parties.

Stay in contact with your estate agent to make sure you are updated on all changes to your contract.

Summary: Why Was My Offer Rejected and How to Deal with a Rejected Offer?

Naturally, any homebuyer will feel disheartened if their offer is rejected, as the house you loved is slipping through your fingers, but always remember there is more than one house up for sale.

Rejection happens frequently in competitive markets, and it’s just part of the journey of finding a new home.

There are several reasons why an offer can be rejected, from lowball offers, contingencies to personal reasons.

A buyer needs to reflect on what mistakes they could have made in their offer letters for you to make suitable changes for future offers.

We have laid out some tips which can help you to deal with a rejected offer, as well as how to approach counter offers, however, keep in mind that these tips are not certain to alter the seller's decision, but they can be helpful.

But follow these three steps after your rejected offer and you’ll only come back stronger:

  1. Analyze your starting offer letter
  2. Think about the resources that you have available to you
  3. Talk to experts and seek advice to figure out what your best situation is
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