Reasons Why Sellers Reject Home Purchase Offers

Sellers reject home purchase offers for many reasons. And, it happens more frequently in hot markets (particularly in sellers’ markets), than you might think. When you’re in the market to buy a home, you should know that, on average, in a balanced market, about 1 in 10 transactions falls through. So, in a highly active market, there’s a greater chance for a home purchase offer rejection by the seller, due to a number of reasons. With this in-mind, we’ll take a look at just why sellers reject home purchase offers.

How to Submit a Strong Buyer’s Home Purchase Offer

Before we get into the rejection basis, let’s first talk a bit about submitting a purchase offer. In a balanced or a sellers’ market, you need to go in with your best foot forward. It’s a good idea to speak with your buyer’s agent about removing one or more common contingencies. Also, be pre-approved for a mortgage and shop below your loan limit. Additionally, you should likewise have a strong down payment, as well as a solid earnest money deposit.

“Once you’ve decided on the home you want to buy, your real estate agent or attorney will draft a purchase offer in your name. The offer is submitted to the seller’s agent, or directly to the seller when it’s a “for sale by owner” (FSBO) listing. The seller can respond in one of three ways: accept the offer, counter the offer, or reject it.” —Home

In short, you as a buyer should make yourself as attractive to a seller as possible. Any hesitation can easily cost you the home you most like. In other words, you have to put yourself in the seller’s shoes. If you were selling your home (which you might be doing at the same time), what would make you pull back? The answers to that set of questions will give you some valuable insight.

Reasons Why Sellers Reject Home Purchase Offers

Now, let’s get into why sellers reject home purchase offers. Well, they do so for various reasons. It could well be a single factor or a combination of things which cause the seller to back away from an agreement. Here’s the most common reasons why sellers reject home purchase offers:

  • The seller receives a better offer. When a purchase offer is submitted, it contains a time limit for the seller to accept or pass on it. During that period, the seller could receive another offer that’s more attractive.
  • The buyer requests a long escrow period. It’s common for buyers to also play a dual role in the process, acting as a seller at the same time. While this is normal, the seller might well need a short escrow period to move on quickly. If that puts you as a the buyer in a pinch, the seller could opt to walk away from the deal.
  • The purchase offer is just insufficient. Sellers can easily be insulted by lowball offers. Or, offers that are just below asking price. Purchase offers which don’t stand out won’t gain favor and the seller might well move on. Or, it could be due to the fact that the buyer isn’t pre-approved for a mortgage.
  • The offer contains too many contingencies. Yet another reason sellers reject home purchase offers is because there are just too many contingencies. Put another way, the buyer is asking for too much out of the seller.

If you are considering buying or selling a home in Orlando, contact us for the latest market information. We’ll also provide you with the right advice about the local real estate market so you make the best decisions.