Why Your Offer Was Rejected And What You Should Do Next
So, you found your dream home and everything seemed to be going great – but then, your offer was rejected. Now what?
Don’t beat yourself up. There are many reasons offers are turned down by sellers. To help you understand where to go from here, let’s dive into a few explanations as to why another offer might have landed in front of yours and what you can do to move forward after your offer is rejected.
Apply for a mortgage today!
Why Was My Offer Rejected?
When you submit an offer to purchase a home, the seller will respond in one of three ways: they can accept, come back with a counteroffer or reject your offer outright. If your offer is denied, don’t feel discouraged – having your offer rejected is a pretty common occurrence in the home buying process and many buyers go through it.
But why was your offer rejected? If you’re trying to buy a home during a seller’s market, the seller may be sorting through multiple offers on their house. While you might assume they would simply choose the highest offer, that’s not always true – there are usually many factors involved in their decision.
While you’ll never know every reason behind a seller’s decision, let’s take a look at a few common reasons your offer may have been rejected.
A contingent offer can be a great way to protect yourself when making an offer on a property. Mortgage contingencies and inspection contingencies make it easier for you to walk away from a deal if something goes wrong – whether it’s issues that crop up during a home inspection or mortgage financing falling through. These stipulations can also help negotiate various other aspects of a home sale, such as requiring that there be a clean title.
The problem with contingencies is that sellers can be wary of them. If a seller is worried about dealing with potential repairs or concerned that your contingencies may delay the sale of their home, they might choose a noncontingent offer even if it isn’t as strong otherwise as your own.
If your offer came in lower than others or you didn’t meet certain financing requirements, a seller is likely to turn your offer down. To avoid your offer being rejected for financial reasons, it’s important to have your mortgage preapproved. Preapproval is an important step to take (and more valuable than prequalification) because it proves to sellers that you have your finances in order and are ready and prepared to buy their house.
Rocket Mortgage® offers a Verified Approval Letter (VAL) to help strengthen your offer and make it stand out among others. A VAL verifies your credit, income and assets using documentation you share with us and can help you make a strong offer as well as know exactly how much home you can afford.
Closing Date Issues
We are all human and have busy schedules – many sellers will understand that and work with you to find a closing date that works for both parties. For others, however, a difference in closing date preferences can lead to an offer being rejected.
If you’re trying to wait for warmer weather, to relocate at a certain time or for your previous home sale to finalize, sellers might decide not to work with you. They may have their own strict timeline to work with and if it doesn’t match up with yours, they may be unwilling to consider your offer.
If you have wiggle room in your schedule, it can help to let an agent know so you can come up with an offer that better meets a seller’s timing needs.
Counter Offers Explained
Like we mentioned earlier, a seller will accept your offer, deny it or make a counteroffer. A seller will make a counteroffer if they’re unhappy with some part of your offer but don’t want to outright reject it.
In their counteroffer, a seller will outline what they’d prefer changed from your initial offer. They might want contingencies removed, a larger earnest money deposit or some other alteration to the proposed deal. It’s possible for the buyer to counter a counteroffer and this can go back and forth multiple times until an agreement is reached and the sale proceeds – or one party rejects the counter, and the deal is off.
If you’re unsure how to tackle a counteroffer, it can help immensely to have a knowledgeable and trustworthy real estate agent or REALTORⓇ help guide you through the process and put your best foot forward.
Seller Rejected Offer Without Counter
Typically, when a seller rejects your offer they come back with a counteroffer to potentially negotiate a deal what works better for them. If your offer is rejected without counter, it might mean that your offer was too low to be considered by the seller.
On the other hand, the seller may have simply been slow to respond. It’s wise to have your real estate agent follow up with the seller’s agent to inquire about a counteroffer or what potential reasoning the seller may have had to reject your initial offer without counter.
Buyer Rejected Counter Offer
As a buyer, if a seller makes a counteroffer that you’re not on board with and don’t wish to continue negotiations, you can reject it. Sometimes you might find a better property, or you just aren’t able to see eye to eye with a seller and may want to move on. Whatever the reason, if you’re not happy with a seller’s counteroffer, it’s in your power to deny it on your end as well.
What To Do Next If Your Offer Was Rejected
First Offer Rejected On House
If your first offer is rejected on a house, don’t give up hope. There are plenty of reasons a seller might turn down your initial offer, including:
- Lowball offer
- Earnest money deposit was too low
- Too many contingencies or issues with contingencies
- Seller received a better offer
- Personal reasons
If your offer was rejected with a counteroffer, go over it with your agent and determine whether the new terms are suitable for you. If they aren’t, you have the option to keep negotiating in hopes you arrive at a compromise that works for both parties or to reject the counteroffer and move on. If you decide to keep negotiating, stay in touch with your real estate agent to make sure you’re always updated and informed on the most recent changes to your potential contract.
If your offer was rejected without a counteroffer, it might be best to move on and keeping looking, though you can potentially have your agent inquire as to why the offer was denied if you’d like to know how to improve your offers in the future.
Final Offer Rejected On House
Having your final offer rejected on a house can be frustrating, but it happens fairly often. Sometimes sellers just won’t budge on their asking price or just won’t see eye to eye with you on certain aspects of the deal. There are many reasons why a seller might turn down a “best and final offer” like this, including:
- Seller received cash offer last minute
- Different buyer wrote a letter
- Decided to stay in the house longer
- Personal reasons
If your final offer was rejected by a seller, don’t be disheartened – there are plenty of other homes out there. Sometimes, it’s better to “lose” on a potential home than agree to terms that you don’t like – or pay more than you were prepared to for the house.
Get An Expert Opinion And Keep Looking
While it can be easy to feel disappointed that you won’t be able to buy a house that you loved, remember that there are always other homes out there and that, in an extremely competitive and unpredictable market, rejection is sometimes part of the journey.
If you want to put your best foot forward in your search for a new home, it’s a good idea to work with an experienced real estate agent or REALTORⓇ. Their expertise and negotiation experience can help you find the perfect home in your price range and make sure your offer on it is as strong as possible.
The Bottom Line: Don’t Give Up If Your Offer Was Rejected
Having an offer rejected can be extremely disappointing, especially if you fell in love with a house. Don’t lose hope, however – even in an extremely competitive market, there’s always another beautiful potential home out there if you keep looking.
If you’re on the hunt for your dream home, check out our guide to finding the right real estate agent to help you on your home buying journey.
Apply for a mortgage today!