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4 Reasons Why Your Offer on a House Was Rejected

By Valencia Higuera

making an offer on a house“Stressful” is the best word to describe buying a house. It involves, among other tasks, the process of improving your credit score, securing financing, choosing the right agent, and looking at different houses. But the frustrations don’t stop there – after you find the right house and submit an offer, there’s always a chance that the seller will reject your offer. And sometimes, rejections come without any explanation.

There are countless reasons why sellers reject purchase offers. If you lost a home to another bidder, one of the following reasons might apply.

Reasons Why Your Home Offer Purchase Is Declined

1. You Can’t Afford the Purchase Price

If you’re looking to purchase a home, stay away from houses that you cannot afford. Discuss a price point with your real estate agent, and if your agent still insists on showing homes beyond your range, respectfully decline. Why tease yourself and risk falling in love with a home that you cannot afford?

Higher-priced properties may offer larger square footage, better neighborhoods, and bonus features, and after looking at these homes, properties within your price range may lose their appeal. In order to make a more expensive home affordable, you may submit a low-ball offer – which often doesn’t sit well with sellers.

Not only can these offers offend, they can be a waste of time and paper. Besides, sellers have their own expenses to pay from the sale proceeds. They have to pay their real estate agent, pay off the existing mortgage, and set aside funds for a down payment on their new house. If you submit a low-ball offer (typically 25% or more below the asking price),  they may reject your bid outright.

Remember this rule of thumb: If you can’t afford a particular house, don’t bid on it.

2. A Better Offer Is on the Table

If a particular house receives a lot of attention, the seller may have multiple offers on the table. Since there is no way to predict what other buyers will bid, it helps to keep your proposed price as close as possible to the asking price. Never assume that other buyers will bid low – and even if they have, it only takes one person offering slightly more than your bid to knock your contract off the table.

However, a better real estate offer isn’t only about price. The seller takes other factors into consideration when deciding whether to reject or accept an offer. For this matter, he might accept an offer with a proposed price that’s less than yours. Because unlike you, the winning bidder did not include stipulation after stipulation in his offer.

It’s normal to have a few contingencies in a purchase offer. But if you get too carried away with the contingencies and start asking for a bunch of extras – such as paid closing costs, unnecessary repairs, new appliances, and new carpet – the seller may pass on your offer regardless of price.

property for sale

3. You Haven’t Been Approved for a Home Loan

This process is not only stressful for you, but also for home sellers. And understandably, they don’t want to accept a bid, only to learn that the winning bidder can’t qualify for a loan. Therefore, many sellers are particular, and only consider bids by those who have been pre-approved for a mortgage loan. For this matter, if you haven’t met with a lender, or if you fail to include your pre-approval letter with your offer, the seller may reject your bid without explanation.

A pre-approval is beneficial for multiple reasons: This not only gets your foot in the door with sellers, it’s the best way to know your purchasing power before you start the home search. Submit an application, and provide your tax returns and most recent income statements, and after a credit check, the lender determines whether you qualify for a home loan and the amount for which you qualify.

4. You Require a Long Escrow

Requesting a long escrow can kill your real estate offer. Maybe you need time to sell your existing house, or perhaps you need a couple of months to come up with your down payment. Whatever the reason, most sellers don’t want to prolong the process. They’re undoubtedly ready to move forward with their life, or they may need to sell quickly for other reasons, such as a divorce, an illness, job loss, or relocation. If you can’t close within 30 days, the seller may accept another offer.

Final Word

If you want to increase the chances of getting your offer accepted, don’t focus so much on yourself. Sure, you want to snag a property at a good price. But remember, there are two parties involved: you and the seller. Learn how to think like a seller and this can help you prepare an offer that they won’t refuse.

If you’ve ever rejected a purchase offer, what was your reasoning behind the rejection?

Valencia Higuera
Valencia Higuera is a personal finance junkie who enjoys reading articles on budgeting, saving money, and credit cards. She has written personal finance articles and blogs for several online publications. She holds a B.A in English from Old Dominion University and currently lives in Chesapeake, Virginia.

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  • Ayaz

    That is very informative article for me, I’ve been looking for a good home but I can’t afford to much loan. Lets see if I can find a perfect home

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