How to Handle Offer Rejection

Once you submit your offer on a home for sale, what happens next is in the hands of the seller. They can either except your offer, come back with a counter offer or they can out-right reject your offer. Rejection does happen, especially in places where home inventory might be limited or there are multiple offers coming in on the same house. Here are some reasons why your offer might have been rejected and what you can do next, after the rejection.

Why do offers get the thumbs down?

• You offered too little: Simply put, you offered less money than the seller was willing to accept. If you intentionally made a lowball offer, your Realtor probably advised you about the real estate values in the area and that there was a much higher risk of rejection with your low offer. Some sellers are willing to counter a lowball offer, while others may simply reject your offer with no response.
• Multiple offers: Many homes for sale in New Hampshire are starting to receive multiple offers for the first time in several years. An improved market means more competition for buyers. The seller of the home may have received several offers to consider. Your agent will let you know if there are other offers on the table and advise you with strategies to improve your offer, but only one offer will win, so you may be facing rejection.
• Terms of the contract: If the sellers require specific conditions to be met and you can’t meet them, then your offer may be rejected. Maybe they need to close the deal quickly or need additional time to move. If you can not agree to the terms they require, the seller may have gone with an offer from a buyer who is more flexible.
• Financing concerns: To be taken seriously you need to be pre-approved for a mortgage. Sometimes, even if you are pre-approved for a loan, a seller may have specific financing preferences or a fear that the type of loan you are seeking will suddenly not go through at the last minute. Sellers fear this and it can sway their decision.
• Unrealistic expectation: Sellers sometimes don’t take the advice of their listing agent on how to price their home based on a Comparative Market Analysis (CMA). This means that rather than pricing it according to what other similar homes in the area have sold for, they are letting their emotions push the figure higher. Everyone wants more money and sellers often feel their home is worth more because of the emotional attachment they have for it. Perhaps your real estate agent did a market analysis and gave you a price range of the home’s true value and you offered accordingly. A seller with a unrealistic belief their home is worth much more will reject your offer and possibly be insulted as well.

What can you do next, after the rejection?

• Discuss with your agent why your offer was rejected. In most cases the seller’s listing agent will give your agent some explanation for the rejection. Remember that emotions can run high when you feel you have found the perfect new home and your offer is rejected, but sellers base their decisions based upon their own financial needs and time restrictions.
• Revisit your strategy. Look at where your offer came in compared to the property values in the area. A good Realtor will understand where your offer went astray. Ask your agent if there's anything you could have done differently (within your comfort zone) to get under contract.
• Revisit the rejected home if it is still on the market several weeks later. The longer a home is on the market, the more flexible a seller may become. Even if they rejected your initial offer, ask your agent to watch the listing and if weeks pass without it going under contract, ask your agent to see if they would reconsider.

Don’t give up at the first sign of challenge. Maybe your home purchase will take longer than you expected but it will happen, so keep looking and don’t settle for just any home that comes along. Widen your real estate search if need be and be patient.