It’s a very difficult market for home buyers. Most are extremely frustrated from viewing homes and the emotional roller coaster ride of writing offers, being countered and ultimately losing out on their dream home. So why are they missing the real estate boat?
There is a lot of competition due to some highly qualified home buyers. The top three reasons a buyer’s offer is not accepted relates to the buyer’s down payment. A buyer with a hefty 20% down payment is competing with cash buyers and others with even larger down payments. I have several clients with down payments of 30 – 40%. These buyers are in position to waive contingencies (appraisal and loan):
1) Low down payment
2) Appraisal contingency (can’t waive)
3) Loan contingency (can’t waive)
The next reasons are the buyer’s inability (or unwillingness) to be flexible:
4) Not offering to wrap up the investigative contingency in 5-7 days
5) Not being flexible with seller’s time frame (when does the seller want to close)? Does the seller want to remain in the home after closing for a week or so (or even longer)?
The choice of lender can contribute to additional reasons for rejecting a buyer’s offer. In today’s competitive real estate market, most home purchase offers are submitted with a prequalification or preapproval letter. Many listing agents will reach out to the buyer’s lender for two reasons: to ask questions and to ensure that the lender will collaborate with the listing agent to facilitate a seamless closing process.
6) Lender doesn’t return phone calls on the weekend
7) Lender won’t talk to listing agent
8) Lender has poor reputation (think Bank of America)
The final reasons a buyer’s offer doesn’t have a snowball’s chance of acceptance is due to their choice of Realtor. Structuring a real estate offer takes skill.
9) Inexperienced agents, have not yet learned how to structure a winning offer. Lending guidelines are constantly changing, part time agents and those new to real estate just don’t have the experience.
10) Their agent is not available (perhaps they are out of town or at Disneyland). The seller and the listing agent likely want to wrap up the offer process and open escrow. If your real estate agent is a solo agent and off the grid, the seller will likely move on.
