Q: “We submitted a full-price offer, solid 20% down payment, 3% earnest money, and a pre-approval letter from our lender. So why did the seller REJECT our offer when there were no others on the table?”
A: There are a few reasons why sellers can–and do–reject an offer that is “perfect.”
In my experience, it’s happened a handful of times, but always for one reason: greed. Apparently, anyway. Truth be told, I don’t know the conversations the listing agents had with their sellers when I was representing the buyers. But here’s what I can tell you about a couple of my experiences:
- Shoreline townhome: Seller’s agent said, “Thanks for the great offer, but the seller really thinks they’ll get a bidding war, so they want to give it another week.”
- Kenmore home: Seller’s agent said, “Thanks, but this seller was expecting a bidding war and even though the list price is $700,000, she really wants $725,000.”
What did my buyers think in each of those cases? You guessed it! They were pissed. Rightly so! No one likes being jerked around. Did they wait, and come back with a better offer after a week? Of course not. They packed up their ball and went home (so to speak).
What Goes Around, Comes Around
And in the end, what did those sellers get? Exactly what they started with. The Shoreline one went pending about 2 weeks after my buyers’ offer and closed at about $5,000 LESS than what we had offered. The Kenmore seller upped her asking price to $725,000 (presumably after her agent talked some sense into her and convinced her that if she wouldn’t sell under $725,000, there was no point in pricing it at $700,000.) A few weeks later, it was pending and ultimately closed at….wait for it….$700,000. Six weeks after our offer was submitted.
Now, it’s true. Sellers are human. And sometimes humans change their minds, or get greedy. Or both. But there are lessons here for both buyers and sellers. Listen up:
- Buyers: Keep it in the back of your mind that this could happen. In this (seemingly eternal) hot market with a bidding war at every turn, sellers’ heads get filled with thoughts of cash. They may think that because “everyone else” is getting multiple offers, that the same thing will happen to them, no matter what their starting price. Or maybe their agent convinced them–somewhat unwillingly–to list at a price lower than they would accept to get the bidding going and when they see that lower number in print, they balk. Whatever the reason, as your offer is submitted, consider what you’ll do if the offer is rejected or countered. Will you walk away, or up your offer?
- Sellers: Have mercy on buyers and their agents and for the sake of all that is good and holy, don’t list your home at a price you won’t really accept. Be prepared to accept a solid, full-price offer. Don’t get greedy or unrealistic. It’s just poor form. (And bad karma). Plus, odds are what goes around from you will come around and you’ll end up right back where you started on the price, and probably with a few more weeks on the market under your belt. (Which also means more weeks of clearing out for showings, keeping the house clean, and all the stress that comes with having your home on the market.)
Have more questions about buying or selling a home? Contact me today.