offer rejection

Why Did the Seller Reject an Offer for That Home?

reject offerWhy the seller rejected an offer to buy a home is really not all that important but it doesn’t mean a buyer might not want to know. Moreover, it might be the buyer’s agent who is more curious about why than the buyer. In my earlier years of real estate, like back when Jimmy Carter was in office, I would often feel like I was helping a buyer’s agent by explaining how the buyer could do better next time, but over the years I’ve come to conclude that trying to help was about the dumbest thing I could do. It’s not my place to try to help. I’m just the listing agent.

First, it doesn’t matter why the offer was rejected, the fact is it was. It didn’t meet some sort of criteria. There could be a bazillion reasons why an offer could be rejected but after the seller has accepted another offer, there is nothing the rejected buyer can do but wait for that buyer to cancel. If the seller is so inclined, the seller could agree to sign a backup offer with the buyer but many sellers dislike backup offers. They often prefer to retain the freedom to respond to fluctuations of the real estate market in the event prices later rise.

Second, short of discrimination / violating Fair Housing Laws, the seller can reject an offer for just about any reason. Sometimes it’s a toss of the dice.

Maybe you could look at it like a point system. Offers need to meet certain points. There is price, of course, terms of agreement, length of escrow, type of loan, possession dates, lender reputations, buyer’s agent reputations, amount of earnest money deposit, even to how the offer is written — whether error free, and each carries weight. When I try to help a seller weigh an offer against others, we add up the positives and look at the negatives. A negative would be a possible bad situation or red flag that could prevent the escrow from closing.

The final choice is always the seller’s. Anything I were to disclose to a buyer’s agent about why their buyer’s offer did not measure up would be subjective on my part and could open my seller to a potential lawsuit, so I don’t go there. My lips are zipped. Yeah, I might know what the seller told me as to why your offer was rejected, but unless I am representing a buyer under those circumstances, which I am not, those reasons will never pass through my lips.

Why the seller elected to reject an offer is not the buyer’s business.

Call Elizabeth Weintraub, Broker #00697006, at 916.233.6759.

Reason #49 Sellers in Sacramento Might Reject Buyers

reject buyers

Sacramento sellers can have odd reasons to reject buyers’ offers.

Believe it or not, but there are real estate agents in this business who unintentionally blow their buyers’ purchase offers out of the water. If you’re a buyer whose offer was not accepted by a seller, you might look more closely at your agent. You probably do anyway because it’s human nature to blame your agent when your offer doesn’t come back signed. It’s not always your agent’s fault, though. Sometimes, it’s your fault for not listening to your agent. And, honestly, sometimes it is your agent’s fault.

I hear agents tell me that their buyer won’t do this, and their buyer won’t do that, and I want to say: Did you ask? Did you ask your buyer? Because I know they probably did not. They might be a white knight agent. They might be a control freak. They might be clueless.

They might be all of those things, I dunno, but I do know that you get further with honey than with vinegar. You can’t push a listing agent, no matter how hard you try. And if you do try, you can alienate yourself and your buyer. Nobody cares about your interpretation of law or real estate practice or anything else you read on the back of a Bazooka gum wrapper. I swear, this is such a simple concept but so few seem to get it.

Once you get past the listing agent, you still need to deal with the home seller. All sellers are different. They bring backgrounds and experiences that may be foreign to you to the table. Get over it. Just when you think you can second guess, you will be wrong. You never know how they might look at something, which is why I like to ask for feedback and input from my sellers.

See, the thing is in a Sacramento seller’s market, sellers are in control. They’re in control from the beginning to the end. It’s their home, they own it, and they make the decisions.

I recall a home I sold several years ago. We had multiple offers from a bunch of buyers clamoring for the home. When we have an even-playing field, I lay out the offers and let the sellers choose with no input from me. Hey, it’s their home. Their right to choose. I do ask why they might prefer one offer over another, and it’s always a different reason.

The reason the seller’s rejected certain buyers for this particular home was the buyers had come over to the house too many times. In the buyers’ minds, they were excited and wanted to show their new home to all of their friends and family. Plus, they wanted to take measurements so they could layout their furniture on a diagram before moving in. But in their excitement, the buyers treated the sellers’ home like a Macy’s display floor. Their offer wasn’t even presented yet.

The sellers felt the buyers repeated visits meant the buyers were indecisive and the sellers rejected their offer. Yet, another example of when you see a home you want to buy, you need to stop what you are doing and buy it.

Is it True a Sacramento Listing Agent Must Present all Offers?

withdrawn-canceled-expired-sacramento-listingAn agent asked last week what he could do when a listing agent in Sacramento refused to present an offer to the seller. Well, he could print out a photo of that listing agent’s mug, draw devil horns on the head, tack the picture to a wall and throw darts at it. That’s one solution. He could also report the listing agent to the Board of Realtors and the Bureau of Real Estate. It’s a violation to withhold an offer. Listings agents are required to present all offers to the seller upon receipt or as reasonably as they can thereafter. It doesn’t matter if the home is already pending, either. An offer comes in, that purchase contract has gotta go to the seller.

A listing with an “active short contingent” status is especially suspect because that status, by its very nature, attracts offers. Agents who refuse to present offers or say no offers are accepted for an active short contingent status in MLS can find themselves fined by MLS as well for violating its guidelines. However, listings of any status are not exempt from a listing agent’s duty to present all offers.

It also doesn’t matter if the purchase offer is written on a roll of toilet paper, the listing agent must deliver the offer to the seller. Real estate agents don’t have the ethical nor legal right to decide which offers the seller gets to see and which can be withheld. Not our decision. But you’d be amazed at how many Sacramento listings agents don’t understand this simple procedure or were never informed of its necessity.

Something else some buyer’s agents don’t realize is the rejection on page 8 does not need to be initialed nor signed by the seller. It is not required. If the seller rejects the offer, no signature is necessary. The listing agent is not required to return a page that shows the seller has rejected the offer by an initial or other acknowledgement. It’s only a courtesy.

An email from the listing agent to the buyer’s agent detailing the outcome of the offer is sufficient. If buyer’s agents try to demand a written rejection by the seller, basically they’re saying a) they don’t understand how purchase contracts work, and b) they don’t trust the listing agent — neither of which is likely to endear them nor their buyers; it’s just stupid and insulting.

If you suspect an offer was not presented to the listing agent, the first step is to ask your buyer’s agent or manager to speak to the listing agent’s managing broker. Brokers are responsible for the actions of their agents. I’d say that most listing agents in Sacramento realize they must present all offers and comply. It’s unusual for the opposite to happen. But bottom line, if you’ve irritated the listing agent, it probably doesn’t really matter what else you do. A complaint will just bring personal satisfaction and help to raise the bar. It won’t get your offer accepted. That’s the real world part.


Sacramento Home Buyers Ask: Why Wasn’t My Offer Accepted?

Sacramento home buyerIt pains me when I see a purchase offer to buy a home arrive in my email and I instinctively realize the buyer will be asking her agent: why wasn’t my offer accepted? In the mind of many Sacramento home buyers, they did everything right. This particular home buyer found the home she wanted online all by herself — it fit her parameters exactly. She fell in love with the photographs and knew before she ever stepped foot inside that house that she wanted to buy that home.

Visiting the home in person solidified those feelings and thoughts. Yes, she should definitely buy that home. She is qualified and has her pre-approval letter that confirms it. The buyer may have provided proof of funds from her checking account. She has delivered an earnest money deposit with her offer. Everything is as it should be. All the stars are aligned, and this is her home. She even offered list price. She did exactly what was asked. All that’s left to do is to figure out where to put the sofa.

Ack. The seller accepted a different offer. Why didn’t she get this house? Why did the seller reject her offer? What is wrong with her Sacramento real estate agent? These are the thoughts running through the buyers’ mind. Do you want to know what the problem is?

First, it’s probably not the real estate agent. I imagine the real estate agent told the buyer that Sacramento is experiencing a limited inventory market, there is not much for sale, and there is intense competition, especially for entry-level homes in good condition. This means many Sacramento home buyers must write a better-than-normal offer. It could entail a higher price, paying more of the closing costs or giving the seller extra benefits, among other home buying offer tips.

I know that buyer’s agents explain this to their Sacramento home buyers. But somehow, that advice seems to fall on deaf ears or for some other reason the buyer does not agree nor understand. An agent can tell a buyer they need to offer more than $300,000 for that listing at $295,000, and some buyers will still ask, can I offer $250,000? These are not true buyers who say those sorts of things; these are people who are mentally deranged, which means yes, they are buyers from another universe and don’t operate in our world.

Working with a veteran real estate agent can also help improve a buyer’s chances of getting an offer accepted. Listing agents know the agents who perform and agents gain a reputation in this industry — good reason not to rely on your cousin’s aunt who happens to have a real estate license.

It’s generally one of three reasons why a buyer’s offer is not accepted: the buyer or the agent or both. Which is your reason? Because it’s not the Sacramento real estate market. We all must adjust to the market. If a buyer conforms to the market, the buyer will get her offer accepted.

Some Agents Are Dealing With Offer Rejection

offer rejection 300x200A frustrated home buyer in Orange County called to ask why I thought that her offers weren’t being accepted and often, in many cases, were unacknowledged. I don’t know why she called an agent in northern California. Now, I don’t know the Orange County market because I haven’t worked in that area since the 1980s. I primarily sell real estate in Sacramento. But if that market is anything like Sacramento, entry-level housing is hot, hot, hot. Which means multiple offers. This buyer is trying to buy a short sale.

I asked the buyer if her agent had any experience working with short sales. The answer was no. I pointed out that some agents refer their clients to an agent with experience in exchange for a referral fee.

“But,” she moaned, “We’ve been writing offers since January; that’s when we moved in with our parents.”

Four months is a long time to be hitting a block wall. “If you don’t talk to your agent about this,” I answered, “You’ll still be living with your parents in September.”

That’s all the help I could offer because I cannot advise nor interfere with another agent’s transaction. It’s against the Code of Ethics.

I also received an offer from an agent on a Sacramento short sale listing after disclosing that multiple offers were coming. The agent offered list price and asked for the following:

  • 3% concession to the buyer
  • home protection plan
  • pest report and completion certificate
  • 2-year roof certification (which may require repairs)
  • seller to comply with FHA requirements

I asked the agent why would she include all these things that the bank is unlikely to pay for? On top of which, with multiple offers, I can pretty much guarantee that every other offer will exceed list price by thousands, if not tens of thousands. Once the bank receives the estimated HUD-1 — even if every offer was identical in price — this agent’s offer would fall to the bottom of the pile because that net will be much lower than all the others.

The agent responded rather curtly, “Because we expect to negotiate those things with the bank.”

It’s not my place to tell another agent how to conduct her business, so I refrain from offering suggestions under these circumstances. The point is the bank will never negotiate with her buyers because those types of offers are rejected by the seller. Who wants to sit in escrow for 8 weeks with a buyer whose offer will be rejected or renegotiated? We want an offer that will be accepted first go around.

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