When To Reject A Home Purchase Offer

When selling a home, you need to know when to accept and when to walk away from an offer. Below are some of the circumstances in which you should consider rejecting an offer.

Unreasonable Expectations

Some buyers have unreasonable expectations that are not in line with the local or even national real estate market. Say the buyer wants a perfect house and wants you to fix everything, including the cosmetic issues (like fading paint) in the house. Or the buyer wants you to shoulder all the closing costs. Those are signs that you are dealing with a difficult buyer who might back out of the deal at any time; it's best to reject the offer before wasting time.

Financial Doubts

You should also be sure that the buyer has the financial clout to purchase the house at the agreed price. The best way to do this is to confirm that the buyer has been pre-approved for the mortgage or has adequate cash in the bank (for a cash buyer). Therefore, if a potential buyer has dodgy financial statements and you are not sure they can afford the house, it's best to reject their offer.

Complicated Contingencies

Contingencies are useful; they protect both buyers and sellers in case something goes wrong. But every party should choose their contingencies carefully so that they are not unfair to the other party. The more complicated contingencies a buyer have, the higher the risk that they might not see the purchase through. For example, if they have a home sale contingency, a loan contingency, and a spousal approval contingency, you are within your rights to reject the offer.

Better Offer

Before you accept a purchase offer, you have the right to look at competing bids and accept a better off. Say you received what you thought of as a good offer at the time, but another buyer has made an offer with a higher price and fewer contingencies. You can reject the first offer if you are convinced the second one is better.

Gigantic Offer

Lastly, you should know that the highest offer is not always the best offer, especially for mortgage buyers. This is because if an offer is way above the appraisal price, the lender will not approve the mortgage. Thus, a buyer who makes a gigantic offer that the lender cannot finance is just wasting time, and you should just reject the offer.

Selling a home via an agent is best because the agent has the experience and skill to identify serious offers. That way you won't accept an offer only to see it fall through at the last minute.