After days of searching, you have found your dream house! The market is hot in your town. The "good" houses usually sell in a matter of days. You don't want to risk losing this house, so you and your agent immediately sit down to write the offer.
But wait a minute... nobody offers "full price". Everybody expects the Seller to come down a little, or to pay closing costs, or to kick in something. That's only fair, and everybody negotiates, right?
So, you instruct your agent to make some "requests" in your offer.
Are you setting yourself up to get your offer REJECTED?
Unless you are in a "Buyer's Market", where there are many houses for sale, and the "average number of days on market" is long, you need to make your highest and best offer at the beginning.
Common Ways to Get Your Offer Rejected
1. Your Offer Price is too Low!
The price is the first thing that a Seller looks at when they get an offer. If the house was priced correctly, and you come in way below that asking price, your offer may get thrown into the trash. If you believe that your lower offer price is justified based on an appraisal, or on recent comparable sales, your Agent should have that information at hand when the offer is presented.
2. Not Putting Up a Realistic Earnest Money Deposit
Second to the offer price, many Sellers look at how much Deposit you have included with your offer. The strength of your offer is reflected in the deposit.
It is true that in Florida no monetary deposit is required; but do you think that a Seller will take their house off the market when you have "no skin in the game"? Even if you are getting 100% financing, such as a VA Mortgage Loan, the deposit reflects how serious you are about buying this house.
3. Not having a Pre-Approval letter or Proof of Funds letter.
Do you really expect a Seller to take their house off the Market, while you go to the Bank to see if you can get a loan? You should have a pre-approval letter from a Lender, and/or documentation or a financial statement that shows you have the necessary cash, before starting your house search. These documents should accompany your offer.
4. Asking the Seller to Pay all of the Closing Costs
You offered a good price... but then you ask the Seller to pay thousands of dollars in costs! Some seller-paid closing costs may be justified or necessary, especially if you are a Veteran, or you are getting a low down payment FHA loan. In those situations, you may need help with the closing costs. Just remember that asking the Seller to pay costs is effectively lowering your offer price.
5. Demanding Too Much Personal Property.
The Seller plans to leave the light fixtures, the draperies, and the kitchen appliances. Your offer also demands the flat screen TV, the pool table, and the dining room set including the china cabinet.
Don't lose sight of your objective - you are buying a house! Don't risk having your offer rejected, because you are trying to get furniture, electronics, or other personal property.
6. Unreasonable Contingencies.
Just about every Offer (excepting cash) contains a Financing Contingency. Most Offers contain Inspection Contingencies. But what about contingencies like, "Buyer's Home Must Sell First", and your house isn't even on the market yet? Or contingencies like, "Subject to Approval by Buyer's Father-in-Law", or "Seller Agrees to Fill in the Swimming Pool"? Those conditions/contingencies can be detrimental to your Offer!
7. Asking for Nickel and Dime Repairs.
The purpose of a home inspection is to make you aware of any needed repairs, damage to the structure, mold or other environmental or health hazards, or other problems with the house or property. If there are major issues such as plumbing, electrical, roof, heating and cooling system, then you probably want the Seller to either remedy those problems, or make monetary allowances, or lower the price.
But what about smaller, less significant issues that are noted in the report? If your offer reads, "As is, subject to inspections", and you demand that the Seller fix, repair, or replace minor items, you risk annoying the Seller and losing the house. Think long and hard before "nickel and diming" the Seller over petty repairs.*
*The language in the contract between you and the Seller will govern what, if any, repairs or replacements the Seller must make. Discuss this with your agent when you write the offer.
8. Closing Date is a long way off.
The Seller has already moved out. Your offer shows a closing date 90 days from now. Do you have an explanation for the lengthy delay that will be acceptable to the Seller? If not, they may reject your offer.
9. Asking to move in before closing, aka "Early Possession".
In most states, you own/take possession of the house on the day of closing. If you ask the Seller to move in prior to that date, they may rightfully see it as a potentially dangerous legal/liability situation. The Listing Agent may advise the Seller to consult an attorney, or talk with their insurance agent, before accepting your offer.
10. Ignoring Requests by the Seller in the MLS
If the Seller has made specific requests or statements in the MLS regarding time for acceptance, length of time before closing, what personal property does or does not convey, etc. and you ignore those requests, you risk having your Offer rejected.
11. Not Understanding the Concept of Multiple Offers in a Hot Market.
If you are in a Market where multiple offers are typical, you MUST come in with your highest and best at the very beginning. A low-priced, contingency-filled offer will not warrant a second look!
When you find your dream house, think long and hard before offering a low price or asking for too many concessions. Have your pre-approval or proof of funds documents at hand; put up a significant earnest money deposit.
Don't lose sight of your objective, which is to buy a house for yourself and your family, a place to call home!