Buying a home is likely to be the biggest financial move that you will make. As such, it is important that you get everything right. You do not want to overpay for a house, but you also do not want to underbid and end up losing out to another home buyer. In order to avoid missing out on your dream home, it is important to understand why a seller might reject your offer.
Your Opening Bid is to Low
Perhaps the most obvious reason why a seller would reject your opening bid — it was simply too low. If a house has just hit the real estate market for $200,000. Sellers are unlikely to accept $150,000. To avoid this scenario, try to only place bids on homes that are within your budget. You may get lucky and find that the $200,000 home goes unsold for a few months and drops to $160,000. If this happens, than your offer for $150,000 will more likely to be accepted. However, you should not bank on this when buying that dream home.
Your Offer was Out-bid
Even if you offer the seller exactly what they were asking for, it is still possible that they will reject your offer. Most often, this happens if another buyer out-bids you. If you were willing to match the seller’s asking price; but the other buyer was willing to offer $10,000 over asking price. The seller will almost certainly reject your offer and accept the higher bid. Of course, you may be given the opportunity to re-bid in this situation and it is up to you to decide whether or not you want to get into a bidding war with another buyer.
You are requesting a Long Closing Period
Home sellers like to be able to complete the deal to sell their house in a relatively short period of time. This generally means that they would like to close the deal within 30 days of the offer being accepted. However, if your offer requests a longer closing period of (for example) 60 days. The seller may choose to reject your offer in favour of a buyer who is willing to close on the deal in a much quicker fashion.
You are not approved for a Mortgage
When accepting an offer on their home, sellers like to be fairly certain that the deal will go through. Failed deals end up costing both sides a lot of time and money. As such, it is always a big draw for sellers to see offers from buyers who have already been pre-approved for a mortgage. This shows that buyers are much more serious about their offer to buy and should not have any issues obtaining financing. You may find your offer rejected if you do not have this pre-approval since there is a much higher chance that you will not be able to close on the deal.
Though there is rarely just one reason why buyers and sellers in a real estate transaction behave the way that they do. These four reasons noted are your biggest contributors. By knowing what a seller is looking for in a deal; you can tailor your bid to ensure that it is as attractive as possible.