How to Refuse an Offer
When you’re in the process of selling your home, you might encounter purchase offers that fall short of your expectations. It’s common to wonder about the proper etiquette for turning down a home purchase offer, and that’s completely understandable. As a seller, here’s the appropriate way to refuse an offer and the main reasons why sellers decline offers.
Reasons to Refuse an Offer
There are various reasons why a seller might opt to refuse an offer. It’s crucial to keep one thing in mind: You are not obligated to sell your house, except in cases of financial or health-related urgency. Your property remains under your ownership until you accept an offer, and you retain the freedom to reject any offer.
Lowball Offer
Assuming you’ve conducted thorough research, you (along with your realtor) will have determined the price of your house based on the prevailing market rates for comparable properties in your neighborhood or area. This price should generally align with what most homeowners in the vicinity deem reasonable. Offers significantly below this price can be considered lowball offers.
It’s not uncommon for potential buyers to make lowball offers initially to test the waters. These offers may not always come in the form of a low monetary figure. Instead, they might involve requesting various concessions. Concessions are specific requirements that either the seller or buyer must fulfill before the property’s sale is finalized. These concessions often take the form of contingencies or conditions. Examples of such are passing home inspections or appraising at the offered price.
When faced with a lowball offer, sellers frequently choose to reject it. The only circumstances where accepting such an offer might be considered are when you are in a hurry to sell, your property has code violations, or the home requires substantial renovations that are not factored into the current market price.
Questionable Funding
Numerous buyers plan to utilize loans for purchasing your property. In such cases, the buyer typically possesses a pre-approval letter from their lender, confirming their eligibility for the loan. Accepting an offer with this letter can provide you with confidence regarding the closing process.
However, if you have any reservations about the buyer’s funding sources, or if the situation appears uncertain and intricate, don’t hesitate to decline the offer. If you’re uncertain about the suitability of the funding source, consult your real estate agent for guidance.
Receiving a Better Offer
With the assistance of your agent, you can assess the quality of an offer, distinguishing between favorable and unfavorable ones. Having an agent by your side throughout the selling process can simplify your comprehension of the market dynamics. You can rely on your agent to collaborate with you in the evaluation of received offers and to guide you in the decision-making process, particularly in a competitive market like the current one. Typically, in such scenarios, sellers often wait until multiple offers are on the table before making a selection. It’s worth noting that in these situations, homeowners usually provide limited explanations for rejecting offers.
Politely Decline an Offer
Frequently, when home sellers receive offers that don’t quite meet their expectations, they may suggest a counteroffer. Nevertheless, it’s essential to remember that just because sellers propose a counteroffer doesn’t mean it’s necessary every time. You have the prerogative to decline without any further negotiation if you choose to do so.
Respond to them promptly
Regardless of whether you plan to counteroffer or not, it’s important to promptly contact the agent to express your gratitude for the offer. Ignoring or allowing their offer to expire without communication is considered impolite and unethical in the home-buying process. Provide an estimate of when a response to the offer will be provided, such as within one or two days. Therefore, make sure to maintain communication.
Decline and present a counter offer
If you intend to counter their offer, instruct your listing agent to strike out the initial offer price on the Purchase to Sell agreement and return it. Have your agent communicate with the buyer’s agent to present your best offer.
Decline without further negotiation
If you’re certain that you have no intention of considering any offer from the potential buyer or engaging in a counteroffer, you can instruct your agent to respond via email with a straightforward message. It doesn’t need to be elaborate to effectively convey your decision.
In the competitive housing market, as a seller, you typically aim to accumulate multiple offers before choosing one and declining the rest. Fortunately, you are not obligated to provide explanations for rejecting offers.
While it’s considered good etiquette to offer a reason, you have the option to politely decline without elaborate justifications. If you find the buyer and their funding source satisfactory but the price isn’t, proposing a counteroffer is a wise course of action.
