6 Reasons Why Your Offers Keep Getting Rejected

Let’s take a look at the 6 reasons why your offer isn’t getting accepted in this booming, multiple-offer market.

1. Ignoring the Market

First off, you need to have a reasonable idea of what to expect before you even consider writing your offer. Take a look at the last few sales in the neighborhood… did they all sell right away? Did they sell for more than the list price? Were there multiple offers? Are there several homes for sale, or just the one you want to bid on?

A few minutes of research can give you a reasonable idea of just how competitive the bidding will probably be for the house.

Too many Buyers are bidding as if they are the only Buyer. You’ve got to respect your competition to have a chance to beat them.

2. Ignoring Their Own Weaknesses

Every Buyer has weaknesses. In a competitive market, you’ve got to set aside your ego and honestly assess yours.

For example: Are you getting a mortgage? If so, you’ll be less-desirable than an all-cash buyer. Meaning, you’ll probably have to bid a little higher than the cash offer to get your’s accepted.

Are you an FHA or VA buyer with a small down-payment? You’ll probably have to pay even more of a premium to be worth the risk.

Are you a contingent buyer? Or needing a long escrow? If the appraisal comes in low, do you have the extra cash to make up the difference?

Take a few minutes to think about why a Seller would not want to accept you. You and your agent have to either solve those problems before you write the offer, or you have to write an offer that specifically compensates for your weaknesses.

3. No Rapport With the Listing Agent

If there will be multiple offers, you need the listing agent to be your advocate. It is critical that your agent be professional, respectable, and present both themselves and you as competent and serious.

The Sellers are the ones who make the final decision, but they are usually looking to their Listing Agent to give them guidance and recommendations.

If, for example, there are ten offers on a property, the Listing Agent is probably uncomfortable with five of them just because of things the Buyers’ agents did or didn’t do. Everything else being roughly equal, these Buyers have no chance of getting the Listing Agent’s recommendation.

The Sellers are looking for the highest price from a Buyer who will actually perform and close the deal. It’s your agent’s job to make sure the Listing Agent believes you will absolutely close and without hiccups or drama.

4. Focusing Too Much on the List Price

Remember, the list price of a home is an arbitrary number they may not accurately reflect the market value of the home. It’s not the price the Sellers want, it’s the value they listed their property for to hopefully get them the highest price.

Buyers commonly assume that the best strategy is to offer the Seller full price and then wait for a counter. I have two clients who did this within the last week and they didn’t even get a counter back.

Consider that every other bidder knows that there are multiple bids. Some will bid full price and hope. Others will bid higher right out of the gate, which sends a clear message that they are more serious and more in love with the house than the full-price bidders.

If a Seller is getting 5-10 offers and 2-3 of those offers stand out from the rest, they will be the ones to continue negotiation and the others will be rejected. To get your offer accepted, it is critical that you make it to “round two” of negotiation, and simply offering full price may not be enough to get you there.

5. Poorly-Written Offers

There are a lot of important parts of your offer besides the price. Too many Buyers write the terms that they would like, or simply leave in the default terms. Other Buyers correctly use offer terms as a way to make their offer stand out from the pack.

Try and write all of those terms as the Seller would want to see them. In other words, don’t give the Seller anything they’d need to counter except for maybe price. This makes you look reasonable and accommodating.

For example:

  • Close in 30 days (only longer if it’s what the Sellers wants)
  • Offer extra time after close for the Sellers to move out. Or even an inexpensive rent-back for longer time-periods.
  • Put down a large deposit (closer to 3% in CA)
  • Shorten your Inspection Contingency from 17 to 10 or even 7 days
  • Equally shorten (or even remove) your Loan and Appraisal Contingencies
  • Do not ask for the Sellers to pay for inspections
  • Consider and increased deposit
  • Include or exclude items from the sale (refrigerator, washer/dryer, etc.) as the Seller would like
  • Make sure that all of the costs are split as would be customary for the area
  • Anything else that the Listing Agent indicates would be appreciated

Also, be sure that your pre-approval letter is rock solid. Many basically indicate that the lender has pulled a credit report and looked at the application, but these are weak letters. Yours should say that you lender has also verified employment, verified funds to close, reviewed bank statements, etc. The stronger the better.

6. Bungling the Negotiation

Let’s assume you are savvy enough to have made it to “round two” of the negotiations – meaning you are actually getting a counter offer and not getting rejected right away. If you’ve made it this far, you’ve got a chance… and this is where a lot of Buyers screw things up.

First off, did the Sellers counter just you? Or did they counter several Buyers? Your agent should try and figure out how many Buyers received counter offers and sometimes the Listing Agent will even tell you if all of the counter offers were for the same price and terms.

Most of the time, there will be multiple Buyers receiving counter offers at roughly similar price and terms. This is where the winning Buyer typically steps up and not only accepts the counter offer, but offers back to the Seller at an even higher price. Depending on the situation, this may not be necessary. But the more bidders there are, the more likely someone is to step up and up their bid.

Losing Buyers commonly:

  • Drag their feet with their reply (the longer you wait to answer, the less-enthusiastic you look)
  • Counter back at price below the Sellers’ counter.
  • Accept the Seller’s counter when other Buyers are probably re-offering more.

But Doesn’t This Mean You Are Overpaying?

A property is worth what someone else is willing to pay for it. If there are multiple offers on a home, clearly there is a strong market for it and you could probably sell it immediately for the price you paid.

That being said, could the appraisal come in low? Yes. Which, is why many Buyers are removing their appraisal contingencies from their offers.

To be clear, I’m not saying that I’m a fan of all of this. This market is as frustrating to the agents as it is for our Buyers. But this is the market we are in and if you want to buy a home in a competitive neighborhood today, these are all factors you should consider.

If you are looking to buy a home in Danville or the surrounding areas, please call me at 925-212-2908 and I’d be happy to help. If you are elsewhere in the Bay Area, please find the agent on this blog from your area.

And, if you know a frustrated Buyer who has been making any of these mistakes, please forward this article to them and hopefully it will help.


3 thoughts on “6 Reasons Why Your Offers Keep Getting Rejected”

  1. Your advise to buyers could have been simply “Just Bend Over” instead of such a lengthy article.

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