One of the most important things to keep in mind about buying a home is that it can be a long and difficult process. It’s rarely as easy as finding the house of your dreams, and scheduling a move-in date. Even when you find that perfect house and make an offer, you could be disappointed to find that your offer was turned down.
When this happens, you may ask yourself or your realtor “why?” There are many reasons why an offer may be rejected by the seller, and here are a few of the more common ones:
The Offer was Too Low
This is by far the most common reason for an offer being turned down. Anyone selling a house will be looking for a fair price, and may also be basing their asking price on an emotional attachment to the home. Making a lowball offer may seem like a smart way to begin the negotiating process, but it can easily backfire.
Not all sellers are interested in spending time negotiating, and may outright refuse a low offer. If the owner has an emotional attachment that is driving their asking price, they may see a lowball offer as an insult, or an indication that you aren’t serious about buying the home.
This is one of the main reasons to discuss your offer with an experienced realtor. Our experience in the marketplace will help you determine a fair price to offer.
Your Low Earnest Money Deposit was Too Low
It’s practically mandatory these days to include a low earnest money deposit with your offer. This lets the seller know you are serious about buying the home, and allows you to offer a “good faith” deposit toward the home price.
Just like a lowball offer, a low earnest money deposit can lead to a quick rejection by the seller. However, a low offer can sometimes be offset by a substantial EMD. This can vary from $1,000 up to 3% of the home’s sale price. If your EMD is lower than this, especially when coupled with a low offer, it’s likely to be followed by a rejection from the seller.
Failure to Meet the Seller’s Demands
Some sellers have demands for special conditions that are to be met when negotiating a sale. These can range from a larger earnest money deposit, a pre-approval letter from a lender, and pushing back the closing date. If these demands aren’t met, the sale can easily fall through. However, meeting these demands in a written home offer can greatly increase your chances of closing on the home.
It’s important to be able to recover quickly if your home offer is rejected. The most important piece of advice I can give is to not take it personally. Dust yourself off, and continue the search. As the #1 realtor in Encinitas, I can help you through the process, and help you find your dream home.