Whenever you are selling your home, there may come a time when you get a purchase offer that you choose to pass over. There are valid reasons to reject an offer. However, if you reject an offer, consider these suggestions for polite ways to do so.
Why You Might Choose to Reject an Offer
A Lowball Offer:
One of the most common reasons to reject an offer on your home is that the prospective buyer has come in with an offer too low to consider. As a general rule, anything below 10% of the initial asking price is considered a lowball offer. However, this amount is subject to differ based on the housing market.
Too Many Contingencies:
An additional reason for rejecting an offer might be that the potential buyer has asked for too many contingencies. Some of the most common real estate contingencies include appraisal, mortgage, title, and home inspection contingencies. Many home buyers also include a sale of prior home contingency, which allows them to withdraw an offer if they are unable to sell their current home within a specified timeframe.
Eligibility of Funding:
If a buyer is having difficulty securing funding for the mortgage loan, this may be another reason to consider rejecting an offer. Keep in mind, too, that if there is difficulty with the loan contingency, the buyer may walk away from the offer without legal repercussions.
According to Investopedia, there are typically seven conditions that must be met in a real estate contract. These include financing terms (interest rate, earnest money, loan type), a seller assist, disclosure of who will pay closing costs, a home inspection, an agreement about ownership of fixtures and appliances, a closing date, and then the time frame details for selling an existing home.
Better Offers in Competitive Markets:
Finally, one of the most compelling reasons to reject a real estate offer is when there are better offers in a highly competitive market. Your real estate agent will help you weed through the details of each offer. To truly understand the best offer, consider not only the total offer price, but also the real estate commissions, particular mortgage loan stipulations or costs, as well as contingencies and time to close.
How to Politely Refuse an Offer
Respond in a Timely Manner
If you realize that the offer you have been given is not one that you’re interested in following up with, the first thing to keep in mind is timeliness. You want to make sure that you and your seller’s agent respond to all offers, even rejections, in a swift and timely manner. Don’t leave a potential buyer hanging, wondering if you’re simply still weighing your options or if you’re not even considering their offer.
Respond with a Counter Offer
Next, if you aren’t entertaining multiple offers and the one you have been given isn’t satisfactory, do consider responding with a counteroffer. All the potential buyer can do is say no, but perhaps there are aspects to the existing offer that can be rewritten or negotiated so that it is mutually beneficial or agreeable.
Respond with a Refusal
Finally, if a no is really a no, then a polite refusal is the way to go. 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 agent reach out via email with a simple reply of, “My client does not accept this offer.” Short, simple, and to the point is always a good rule of thumb to follow.