Do I Have to Accept a Full-Price Offer on My House?
Home sellers aren’t obligated to accept any offer on their home—no matter how much money it’s for. There may be other offers on the table or, in some cases, they may want to hold out for more money. In these cases, a seller may reject an offer, even if it’s at asking price—or even above.
This may have consequences for the seller, buyer, and any real estate agents involved in the transaction. If you're the seller, you should carefully consider the repercussions before rejecting a full-price offer.
Why You Might Want to Reject a Full-Price Offer
Sometimes, when selling your home, you may receive a full-price offer and immediately feel regret. You may wonder: Did you underprice your home? Should you hold out for more money?
Here are a few other reasons you may want to reject a full-price offer:
- There are other bids on the table.
- Your situation has changed, making you less motivated to sell.
- You think your home is now worth more than the original listing price.
This sticky situation can apply to all kinds of sellers in every market across the U.S. If you find yourself wrestling with this issue, it may pay off to work with an experienced real estate agent to make sure that you don't miss out on a potential buyer.
You also want to ensure that, in the process of trying to negotiate, you don't end up creating a legal issue for yourself.
Let's say a couple lists their home for $325,000. For three months, they don't get any offers—not even a lowball offer. After three months without action, they finally receive a full-price offer for $325,000. However, in those three months since the house went on the market, the sellers feel like real estate in their area has heated up considerably. Nearby homes seem to be selling for much more than they're worth.
Now their real estate agent is pushing them to accept the offer of $325,000, but the sellers want to counteroffer at $340,000. Their agent is reluctant, which is confusing for the sellers. They thought that agents were supposed to get the highest possible price for them, and they worry they're leaving money on the table by accepting this offer.
Should You Reject a Full-Price Offer?
The most important thing to take away from the example scenario: In that case, the sellers only received one offer on their home.
In seller's markets, it's normal to receive multiple offers, if you are selling a highly desirable home. Multiple offers can create competition among potential buyers, possibly leading to a bidding war that pushes the price well beyond the original listing.
When you receive only one offer, you have less leverage. If you raise the price on the only buyer who is willing and able to purchase your home, it may mean you lose the sale altogether.
Rejecting a full-price offer can even come with legal ramifications, depending on what's in your listing agreement.
Consider the Repercussions
If you make the decision to reject a full-price offer, there are several potential repercussions that you should be aware of.
Though you aren't legally required to accept any full-price offer, if you’re using a real estate agent, you could still be on the hook for their commission. In some states, when a seller receives a full-price offer from a qualified buyer, it means the real estate brokerage has earned the commission. If you reject the full-price offer, you might still owe the brokerage that fee for successfully securing the offer.
You may still owe your agent a commission if you reject a full-price offer. In the brokerage's eyes, it has performed the task it set out to do—finding a buyer who's willing to pay full-price for the home—and it expects to be paid accordingly.
Be sure to check your listing agreement because it may contain verbiage that says the seller cannot reject a full-price offer.
Moreover, the multiple listing service (MLS) where the listing is published may have its own rules for offers as well. For example: In Northern California's MetroList MLS, there are rules stating that if a seller receives a full-price offer and rejects it, the agent must either raise the sales price in the MLS or note in the confidential agent remarks that the seller rejected a full-price offer.
A rejected offer note in MLS would probably stop other agents from recommending the home to their buyer. Additionally, it can be considered misleading advertising if a seller advertises that a home is available to buy at $325,000, but they actually want $340,000. If you want $340,000 for your home, you need to advertise your home at $340,000.
What a Buyer Can Do if You Reject Their Offer
If you reject a full-price offer, there are few things the potential homebuyer might do:
- Come back with a higher bid
- Consider other methods of negotiation (waiving contingencies, for example)
- Move on from the property
While, of course, the first or second options are the most ideal for you as the seller, there's a real chance the buyer will just move on. In that case, you may lose out on making a sale altogether.
In some cases, the buyers may continue watching the listing. If you're unable to secure a higher offer, the interested buyers may make another offer down the line.
The Bottom Line
While there are valid reasons to reject a full-price offer, be sure you understand any potential repercussions that could result from that decision. Not only could it have consequences with your listing agent, but it could impact the marketability of your home with other buyers in the future.
If you're not sure what the best course of action is, it may be a good idea to work with a real estate agent who can help you get the best deal when selling your house.