How to Refuse an Offer from a Potential Homebuyer
When you put your home on the market, you should expect to receive lower offers than you would accept. However, you still have to refuse the offer, and you should do so using proper etiquette. There are many reasons and ways to reject an offer which we discuss below.
You own your house until you accept an offer and go through all the paperwork, and you’re under no obligation to accept anything. That being said, here are some of the most common reasons sellers reject offers.
If you or your listing agent has done their homework well, you priced your house according to what comparable houses in your area are selling for. That price is one most people consider fair. Any offer asking for 30% off your listing price is considered a lowball offer.
Many potential buyers plan on negotiating a price and enter the bid with a low offer, just to see if you’ll accept it. Sometimes, these low offers don’t come in the form of a low number, but rather they ask for a number of concessions from the seller.
Concessions are any requirements the buyers or sellers must complete before the house closes. These concessions (often in the form of contingencies) can be in the form of the condition that the buyer’s house must sell first, the house must pass an inspection, or the house must appraise for the offer price.
While you do not always have to reject a lowball offer or turn away offers with contingencies attached, you should consult with your real estate expert to completely understand the terms before accepting these types of offers.
Prejudiced Against Loans
Some homeowners will reject your offer if you’re using a certain type of loan, such as an FHA loan. While these loans are not inferior to other types of loans, the listing agent may prefer to work with other types of loans that may have less stringent home buying stipulations.
Before you reject any offer based on the loan type alone, do your own research! You may find out that you’re perfectly fine with the loan option you got initially.
A buyer that plans on using a loan to fund the purchase of your house will often include a pre-approval letter from their lender proving they are eligible for a loan of that amount. A pre-approval letter (while not required) gives the seller peace of mind about the house closing if they accept this offer. If the seller has any reason to doubt the funding of the potential buyer, they will usually turn down the offer.
Receiving a Better Offer
In competitive markets, sellers will often wait until they have several offers submitted before accepting one and rejecting the rest. In instances like this, homeowners usually won’t provide much of an explanation as to why they rejected the offer.
Proper Way to Refuse a Home Purchase Offer
Get back in a timely manner.
If someone submits an offer that you aren’t satisfied with, don’t leave them in the dust. Respond to them before their offer expires (it typically says when this is on their offer). Simply letting their offer expire is something most consider rude, and a sure way to make sure the buyer won’t offer again if you don’t receive any other offers.
Refuse with a counter offer.
If you want to counter their offer, have your realtor cross off the original offer price on the Purchase to Sell agreement and send it back. This document can get rather complicated depending on how many times it gets passed back and forth. Prevent this by asking your real estate agent to reach out to theirs with your best offer.
If you’re certain that you don’t want to entertain any offer from the potential buyer or don’t want to counteroffer, have your estate agent reach out via email with a simple reply of, “My client does not accept that offer.” It doesn’t have to be extravagant to get the job done.
Whether you are buying or selling your home, Coldwell Banker Carroll Realty’s local realtors are ready to help you get the most bang for your buck! We have experienced real estate agents throughout Panama City, Panama City Beach, and 30a ready to meet with you! Contact us today to get help from professional, local real estate agents.