Why Did the Seller Reject Your Offer?

Reasons for Rejected Offer

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Rejected offers cause home buyers considerable disappointment and enormous heartache. A seller doesn't have to rip the buyer's offer in half for buyers to feel like their hearts have been ripped out. All a seller has to say is "NO," and your offer is rejected.

Here are the top four reasons purchase offers are rejected.

Offer Rejection Reason #1: Price Is Way Too Low

  1. Sellers can easily feel insulted. If a buyer offers too little, the seller might believe the buyer is not a serious buyer.
  2. The seller may be too angry to respond and, therefore, will reject the offer outright.
  3. If the house has just come on the market and is a fresh listing, the seller might feel it's too early to look at less-than-list offers.
  4. In most states, sellers are not required to respond to offers less-than-list price but agents are required to deliver them.

Reason #2: Selling Agent Is a Jerk

Scoff as you may but this can be a serious problem. Agents who possess the social graces of a chimp should have their real estate licenses suspended because nobody wants to deal with them. Agents without manners are wasting their time and making their buyer's lives unknowingly miserable. If a selling agent annoys the listing agent, especially during a multiple offer situation, it reflects poorly on that agent's buyer. Make sure your agent doesn't commit any of these sins:

  1. Screams or raises voice on the phone or in person.
  2. Forgets to say please or thank you.
  3. Makes demands and issues ultimatums.
  4. Insults the listing agent by printing out comparable sales or market data, inferring the listing agent is stupid or ignorant (even if it's true).
  5. Maintains a demeaning attitude.
  6. Approaches the listing agent in an aggressive or pushy manner.
  7. Does not display professionalism.

There is nothing to prevent a listing agent from taking two identical offers to a seller and saying, "I don't like Agent A, but Agent B is professional. Choose which offer you want." Most sellers given those circumstances will choose the offer from Agent B. Don't ever forget that this is a networking business; being polite and respectful earns kudos many times over. Don't let your agent sabotage your chances from the get-go. If it's not the price, often it's the agent.

You would hope this doesn't happen in real estate yet it happens every single day.

Reason #3: Listing Agent Represents Competing Buyer

A little-known practice among consumers is the variable or dual-rate commission discussion that listing agents sometimes specify and negotiate into listing agreements. What this means is the listing agent makes an agreement with the seller that if the listing agent ends up also representing the buyer, the listing agent will reduce her commission (because she's earning both sides of the commission).

For example, if the listing agent is charging a traditional real estate commission, and perhaps paying the selling broker a bit less, she might agree to knock a percentage point off the commission if she represents both sides of the transaction. It's called a variable rate. Therefore, if your own agent writes an offer, the seller will pay more and net less. Ask your agent to check MLS to see if the commission is variable. If so, your agent might be willing to match terms to get you the house.

This does not mean that you need to call the listing agent to see the house.

Reason #4: Buyer Did Not Meet Seller's Specific Needs

Selling agents should always call a listing agent to find out if the seller has any specific requirements or hot buttons. Sometimes listing agents include helpful hints in the agent remarks portion of the MLS. If so, write them into the offer.

  1. If the seller needs a long escrow, offer a longer closing date.
  2. If the seller wants to see a substantial earnest money deposit, increase the deposit.
  3. Sometimes the financing terms stated in MLS are not met. For example, if the seller will accept only cash offers, don't expect an offer with FHA terms to get accepted.
  4. If the seller is concerned about repairs, offer to buy the property "as is," after providing for a home inspection.
  5. Maybe it's a lender's preapproval letter that the seller wants.

The point is, you can't know how to satisfy the seller's demands if you don't ask.