Making Home Purchase Offers Shine
One of two things can happen when you make an offer to purchase a home. Either it's rejected or accepted, and if you're like most other buyers out there, your heart is laced within that offer; and the last thing you want is to have it rejected. But it happens. All the seller has to do is say no and you may find yourself heartbroken, wondering what went wrong.
You may never be able to guarantee that your offer will get accepted, but familiarizing yourself with the top reasons why offers do get rejected can minimize the chance that it will happen to you. And with Boise's tight inventory, multiple offer market-it's more important than ever that the offer you make is as close to perfect as you can get it, the first time, and without mistakes. Sound stressful?
No. 1 Too Low an Offer
Your offer price was too low. You'll see this one over and over again, and it's the number one reason why home purchase offers get rejected. Sellers can easily get insulted if they feel a buyer is offering too little. Oftentimes a seller's emotional attachment reflects itself in the asking price, and if you offer a price they feel isn't fair, the seller may automatically reject your offer. In fact, sellers aren't legally required to respond to offers that fall below list price. In short, if you don't want your offer to get rejected, don't throw a low ball offer. If you do, prepare yourself for a higher risk of rejection.
If you do offer a price that's too low, the seller isn't going to waste any time and effort to make a counteroffer. In this tight inventory market, you can bet that someone else out there loves the same home you do, and they'll have an offer either in front of you, or right behind you. The seller will move right onto these if yours is too low. Realtor.com suggests that if your initial offer is accepted, to protect yourself by giving a substantial earnest money deposit with a lockout agreement. This way, the seller cannot consider other buyers for an agreed-upon time period.
No. 2 Agents code of Conduct
If the price isn't the reason your offer got rejected, it's often the agent that's to blame. There's a certain code of conduct you can expect a seller's agent and buyer's agent to follow. Lack of professionalism, such as uttering demands, throwing insults, or forgetting manners, are all top culprits that can contribute to failing offers. The seller and buyer agents must be in contact with each other to determine what the terms are, and if either one has a difficult personality, it can sabotage your chance of success.
No. 3 Double Agent
The seller's agent represents competing buyer. This is referred to as a dual rate commission, and can stop a home purchase offer from being accepted. Dual rate commissions are sometimes negotiated into listing agreements, which means that the seller's listing agent will reduce his/her commission on the basis that they end up representing both the buyer and seller. You can ask your agent to check the MLS to see if the commission is variable.
No. 4 Not Meeting the Seller's Needs
You failed to meet the seller's needs. Your offer to purchase can easily fall through if it does not meet the demands of the seller. It's likely that the seller will have their own set of special conditions, and it's in your best interest to comply with these demands if you want your offer accepted. Your agent should always contact the seller's agent to find out if there is any specific requirements the seller is adamant about. If there are, they should be written into the offer. The seller may want any number of different things, including accepting cash only offers or a higher than normal earnest money deposit. The seller may be concerned about repair issues, and if so, consider buying the home “as is” in your home purchase agreement.
The idea is to look reasonable and accommodating when you write up an offer to purchase, and not only when it comes to price. Buyers oftentimes end up writing the terms they'd like to see or leave it to default. A smart buyer will make their terms compliant with the seller's, and stand out from the pack.
Aside from having a rock solid pre-approval letter from your lender, be flexible with terms. Consider giving the seller extra time to move out. Include or exclude any items from the sale (conveyances), such as the refrigerator or the washer and dryer. Also, be sure and include the amount of your deposit. Check all the correct boxes, double check the math and terms, include all required documents, and so forth.
Don't give the seller any reason to refuse your offer.
Realtor.com: Make Them an Offer They Can't Refuse
Realtor.com: Why was Your Home Purchase Offer Rejected?