Sept 10 2018
Source: “So Your Offer Was Rejected? This Might Be the Real Reason Why,” realtor.com®
Insight as to why buyers offers get rejected.
So, your clients fell in love with a home and made an offer that they felt was a very good one. Now they want to know why it was rejected. It’s not always cut-and-dried, but realtor.com® recently featured some of the reasons sellers don’t accept certain offers, including some surprising logic.
The buyers revealed too much.
Personal letters have become a popular strategy that some real estate professionals recommend, but it’s important to ensure the letter doesn’t hurt your clients’ chances. “When the bids are very close, things like a personal offer letter can either help or hurt, depending on what it says,” Andrea Gordon, a real estate agent with Red Oak Realty in Oakland, Calif., told realtor.com®. “In one case, the buyer went on and on about the huge remodel he would do when he owned the house. But this was a slap in the face to my sellers, who had spent a considerable amount of money in the past five years remodeling the property.” Make sure your clients don’t unintentionally insult the sellers or their personal tastes in trying to convince them to take their offer.
The offer was too high.
Sellers may want to bypass those offers that seem too good to be true because they could be an appraisal nightmare. “I had a listing in a very sought-after neighborhood, and we immediately received two offers over list price,” says Gail Romansky at Pearson Smith Realty in Ashburn, Va. Romansky says the first offer was $15,000 over the list price and the second one was $40,000 above asking. “While the latter higher offer was tempting to take, I explained that the house was not likely to appraise for this higher amount, which meant the loan might not close,” Romansky told her clients. “So we went with the lower offer of the two.”
Buyers nickel-and-dime everywhere else.
The full-price offer may be enticing to the seller but the request for, say, $10,000 in closing costs may sour them on it. Tracey Hampson, a real estate professional with Realty One Group in Valencia, Calif., says buyers making attractive offers should avoid feeling like they have the right to collect elsewhere in the transaction.
The financial picture raises questions.
Of course, sellers want to feel assured that the buyer can actually complete the transaction. “I had a buyer who made an offer on a house, but they came in with a low down payment, a very high debt-to-income ratio, and a subpar credit rating,” says Kevin Deselms at RE/MAX Alliance in Golden, Colo. “This spooked the seller because it called into question the buyer’s ability to get their loan funded and close the transaction.”