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Why Do Home Sellers Reject Offers From Buyers?

In a previous article, we talked about how to make a good offer when buying a home. We also covered the topic of how to close more real estate deals and what to expect during closing. But what we haven’t talked about yet are reasons why a buyer’s offer gets rejected.

Sometimes, it’s the buyer’s fault. Other times, the home seller just has unrealistic demands. Find out more about what these deal-breaking offers are so you can avoid them.

1. The price was way too low

A low-ball offer doesn’t show any seriousness when purchasing a property. Home sellers mostly know how much worth their home has on the market. By offering a price that’s too low, the home seller will feel insulted and will reject the offer without discussion. 

Seasoned home buyers always evaluate the local housing market first to make a good offer on a house.

2. The price was way too high

Most agents of home sellers will dissuade their client from accepting a high offer especially if the property’s price assessment won’t be as much as the offer amount. Not to mention a lender will reject the loan if the loan amount is higher than the property’s value. Either way, the deal will fall apart.

3. The real estate agent was playing two roles

Some home seller agents make a deal with their clients to reduce their commission if the agent represents a buyer they want as well. This might sound counterintuitive in earning commissions but a single real estate agent gets more money if they eliminate the chance of having another agent at the negotiation table.

When that happens, only buyers the agent picks get the chance to negotiate.

4. The buyer just doesn’t meet the seller’s needs

Some home sellers have unreasonable and unrealistic expectations that a buyer cannot provide. A good example would be a seller not allowing home inspections to negotiate for a good price. If the buyer won’t compromise, the deal is over.

5. The buyer lacks financing

A good home seller always makes sure to be paid in full for their sold home. That’s why they’ll ask the buyer how they’re supposed to pay for the house to proceed with the deal.

If the buyer decides to pay for the house through a mortgage or cash, the home seller will ask for a lender’s pre-approval form, bank statements, or proof of assets. And if the buyer cannot provide these documentations, that means they cannot pay for the house and the offer is rejected.

6. The buyer asked for too many concessions

Concessions are buyer’s demands that make sellers pay above and beyond a home’s buying price. Homeowners hate it for it chips a part of the home seller’s proceeds. One example would be asking the seller to pay for most or all of the buyer’s closing costs. 

Ask for a lot of concessions from the home seller and you’re sure to get the red stamp of disapproval. 

7. The buyer didn’t offer to pay an earnest money deposit

In hot markets where the demand for property is high and the buying and selling of houses are fast, sellers will receive a lot of inquiries and offers. This can be too stressful on the seller’s part because they will need to evaluate all the offers.

That is why they need to pick the most serious buyer with the best offer ASAP. For sellers to know the seriousness of the buyer, they will get into a purchase contract and require an earnest money deposit from the buyer.

If your offer is good but didn’t mention paying an earnest deposit, then don’t expect the home seller to consider your offer and kiss your dream house goodbye.

Home sellers are just like buyers. If a buyer wants their property purchase to be worth it, home sellers will also want to get the best deal out of their house. So it is important that you know how to put yourself in their shoes to make a good offer. The first step in making a good offer is to understand a seller’s motivation for selling the home.