Unfortunately, this is almost inevitable. Getting an offer rejected on a home is a terrible feeling. You’ve fallen in love with it, you see yourself living in it (you even know where your couch will go), and you want to make a financial investment in it. A home is a huge committment so to say that you’re ready to take that step is filled with excitement and anxiety all at the same time. However, to then have it coupled with the disappointment of your offer being rejected is unsettling. The reality is your first offer on a home is almost never accepted so you negotiate. But what about if you negotiate to the point where you can’t anymore? You’ve reached your limit and you’ve lost out on the house. You think your offer was completely reasonable; so why was it rejected?
Our recommendation is to begin by re-evaluating your offer.
1) Too Low: What did you base it on? Did your agent conduct a market analysis for you to see what the appropriate current market value on the home was? While some sellers are willing to counter, others will simply find the offer insulting and move on. Be particularly careful of doing this when the home has only been on the market for a short period. It’s less likely that the sellers will accept an offer so low when their home hasn’t been on the market that long.
2) Terms of the Contract: Maybe the price point in your offer was fine but you were asking them to include certain home renovations or furniture in with the purchase price. While asking for some things is common, asking for too much can turn a seller away and make them think that you’re unreasonable and will be difficult to work with. Cut down on what you’re asking for.
3) Your financing option: Some sellers prefer to see higher deposits. Some sellers hate the idea of selling to someone who is using 100% financing because the process is sometimes longer. They’d like to see someone who is putting a percentage down. Ultimately, if you’re doing 100% financing or only putting down a $1000 deposit because that’s all that you’re able to do then there’s nothing that you can change about this. This is purely a seller’s preference.
4) Attachments: Real Estate is (usually) very personal. It’s someone selling their home that they’ve built memories in and possibly raised a family in. They have emotional attachments to the home. They view its value far higher than any appraiser or market value analysis will. This means that they have an idea of what they’d be willing to sell their home for and there’s not much negotiating around that number so while your offer may have been reasonable, their expectations are not.
What to do after your offer is rejected:
1) Keep looking: While you fell in love with this one and now your heart is broken, another one will come along and you’ll love it just as much, if not more. Buying a home can take months and it can be filled with setbacks, but remember that at the other end is a great reward that you’ll be so proud of.
2) Keep your options open: Maybe its time to consider another neighborhood? Or maybe you don’t need a finished basement? Open up your options and you’ll be surprised as to what amazing homes are out there.
3) Wait it out: As we mentioned above, the less time a home is on the market, the less likely they’ll be willing to let it go for a low price. Watch the home. See how long it stays on the market. Does the price drop? When we have clients whose offers have been rejected we always tell the selling agent to please call us if they ever change their mind. We keep the lines of communication open and continue to watch the house in the market.
What not to do after your offer is rejected:
1) Take it personally: This is not about you. It’s about them. They have their own bottom line in their mind (whether its price, financing or terms of the contract) and it’s about what they’re willing to accept or not accept. This has nothing to do with you personally.
2) Give up: After many hurdles, it can be attempting to make any offer on any home that’s in your price range or to just stay where you are. Don’t think about the small journey…think about the long one. In 15 years will you be happy if you stayed where you are or will you be happy that you dealt with a few months of difficult home searching to find the home that’s grown with you and your family?
Yesterday we closed on a home with a client who had been searching for over a year. After dealing with a terrible lender, and making multiple offers on homes to have them rejected, this client. his wife and newborn son are moving into a fantastic house that they got at a great price. They are happy, they are content, and they are ready to build a life in something they own.
It’s a long, frustrating process but where you lay your head down at the night is the most important place in the world so taking careful, slow steps to finding that perfect place will be completely worth it in the end.