When hunting for a home in NYC one of the most significant moments is when you make a purchase offer on a property. Chances are, you’ll be competing with multiple buyers who are also interested in the home, and if your offer is rejected outright, it can be heartbreaking. Maybe they got a better offer from someone else, or they found your finances to be questionable. Often the reasons why an offer is rejected are the same. Below are five of the most common.
A smaller offer but with less or no contingencies can work out as a better deal for the seller.
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The sellers received a better offer
If your first thought on viewing a property was “dream home,” chances are, other buyers thought the same. Extra interest means extra offers, so there’s a good chance of being outbid if your offer is too low. The offering price isn’t the only thing sellers look at. They may have had an offer similar in price to yours but with better terms. For instance, they have mortgage pre-approval, are offering all cash or have no contingencies, to name just a few. Make sure you do enough research on the property and discuss it with your buyer’s agent to ensure you put forward the strongest offer possible.
The sellers have unrealistic expectations
It often goes this way. The sellers launch their listing with a great marketing campaign and at the right time of year. Almost immediately they are flooded with interested buyers who have been waiting for a home just like theirs to hit the market. Most of the offers a property will receive happen within the first few days or weeks of the listing coming online.
Some sellers mistakenly conclude that all these early offers must mean they have underpriced the property. The dollar signs appear in their eyes, and they start to think they can make more by waiting. Unfortunately, there is little you can do about this except wait for them to realize their mistake or another listing comes along.
You don’t have your finances in order
Have you received pre-approval for a mortgage? Or, do you have enough money in the bank for an all-cash purchase? If your answer was no to both questions, you’ve given the seller good reasons to reject your offer. Remember, being pre-qualified is not the same as being pre-approved for a mortgage. The latter makes for a stronger offer as it assures the seller you’ve been thoroughly vetted by a financial institution for the necessary funding of the purchase.
Try to see it from the seller’s perspective. They could have two great offers to decide between. One for the asking price but with no pre-approval. The other, slightly less but with pre-approval. Chances are they’ll go with the second offer as it’s far more of a sure thing.
The time frame doesn’t suit the seller
You could have everything else in your favor but if the timing isn’t desirable for the seller your offer stands a good chance of being rejected. Before making an offer, you should find out what type of closing date the seller can work with. If they need a quick closing, a 60-day closing date may not work. Similarly, if you make an offer with a very long closing date that drags out the escrow for weeks, this can put the seller off. An excellent buyer’s agent will know what questions and answers to seek before making an offer. If the timing isn’t right, this can sink a deal.
You requested too many contingencies
It’s never just about the price when it comes to making an offer on a home. Even if your offer is the highest of the competition but comes with a lot of contingencies don’t be surprised if it gets rejected. There’s nothing wrong with asking that the seller fix X or Y but know, too many requests damages the chances your offer will be accepted. A smaller offer but with less or no contingencies can work out as a better deal for the seller. If you absolutely must have some contingencies try to keep them reasonable and consider the offer price you’ll be making.