If you are selling your home, you will naturally need to find a qualified buyer. And if you find a qualified buyer willing to pay your asking price, that often means you will be one step closer to finally selling your property. In most cases, you’ll probably want to accept an offer to buy your home, especially if the offer is at or above the original asking price. However, there are still plenty of exceptions to this general rule, especially if the housing market is very competitive.
However, just because someone has made an offer, it doesn’t mean you have to accept it. Sellers can reject an offer for almost any reason. Continue reading to learn everything you need to know about rejecting an offer on your home. Understanding how this process works and your rights as a homeowner, you can decide whether accepting or rejecting an incoming offer is right for you.
Do You Have to Accept an Offer on Your House?
With very few exceptions, a seller never has to accept an offer to buy their home. In fact, even if the offer is well above the asking price, the home sale will not progress until the seller accepts a bid from the buyer and signs the corresponding paperwork.
Sellers are under no legal obligation to disclose their reasons for rejecting an offer. However, real estate agents typically recommend their sellers provide a reason as a courtesy.
After a seller rejects an offer, the original bidder has several options. They might decide to walk away and consider other homes or come back with a higher bid. Depending on the reason for the rejection, they might also modify their offer in different ways, such as deciding to waive contingencies.
While sellers have the right to reject any offer, choosing to do so can sometimes have consequences. For example, depending on the nature of the rejection and the contract you signed with your real estate agent, rejecting offers might result in having to pay a substantial fee to your agent. This is why rejecting a bid to buy your home is a decision you should take seriously.
Reasons You Might Reject an Offer on Your Home
You may wonder, “why would I ever reject an offer to buy my home?” After all, when you decide to list the property at its current price, you choose that price for a reason. However, various factors may influence your decision to refuse a full-price offer on the house. At the end of the day, your house is your house, and you do not have to accept an offer.
You’ve Received Multiple Offers
If you receive multiple offers to buy your home, you can naturally only choose one to move forward with. Therefore, a seller refuses a full-price offer when a better one comes in. Another prospective buyer may submit a stronger offer that includes a higher offer price, a willingness to cover closing costs, or waived contingencies. Therefore, sellers must carefully consider every offer to ensure they choose the strongest one.
When you list your home in a seller’s market with low supply and high demand, you increase the likelihood of receiving many potential offers. You should therefore discuss the rejection process with your agent before putting your home on the market so you feel prepared to handle an influx of potential buyers.
You Believe Your Asking Price is Too Low
In a competitive housing market, it is not uncommon for sellers to receive a bid to buy their home the very first day they list. If someone comes to you with a bid at the asking price within the first hour, that might be a sign you can raise your asking price and receive more for your home. If that’s the case, you may reject the offer and discuss the next steps with your agent. You can then raise your asking price and see what the market offers.
You’ve Changed Your Mind About Selling
There are many reasons you change your mind about selling your home. Whether you were only moving to accommodate a new job offer that fell through, you were outbid on your dream home you planned to relocate to, or you simply had a moment where you realized you could never leave the place you call, “home,” you do not have to accept a bid if you no longer want to sell.
Remember that as soon as you decide not to sell, you should immediately communicate with your agent to take your home off the market.
You Have Concerns About the Buyer’s Financial Standing
The Fair Housing Act (1968) prohibits discriminating against a buyer based on race, color, sex, religion, familial status, national origin, or disability. Sellers cannot reject an offer due to any of those reasons.
Sellers can still reject an offer if a prospective buyer cannot prove their ability to finance the purchase. They can also reject buyers who are part of an entity like a corporation or a bank.
Should You Consider Rejecting a Full-Price Offer?
Your selling situation impacts your decision to accept or reject an offer. While rejecting an offer opens you up to a potentially more substantial offer, it also comes with additional risk. There is no guarantee that you will receive another offer on your home, and if your home continues to stay on the market for too long, it loses its appeal to potential buyers.
In an unpredictable market where the Federal Reserve continues to raise interest rates (as they have several times in 2022), there is no guarantee that declining an offer today will guarantee a stronger one tomorrow. Additionally, those who decide to reject an offer may have to pay a fee to their listing agent.
How to Reject an Offer on Your Home
If you decide to decline an offer on your home, your real estate agent will guide you through the following steps. They will notify the bidder’s agent that you rejected the offer, advise you on how to reject, and potentially provide feedback on the buyer’s offer.
When rejecting an offer to buy your home—whether at the asking price or even above asking price—here are a few things you’ll want to keep in mind:
- Don’t ignore the bid. Instead, politely notify the bidder that you are rejecting their offer.
- Consider telling the bidder why you are rejecting the offer.
- If possible, tell the bidder what they could potentially do for you to accept the offer (for example, increase their bid by a certain amount, waive contingencies, etc.)
- Be empathetic, as the bidder might understandably be upset that you rejected their offer. Put yourself in their shoes and communicate in a way you would want a seller to communicate with you if you were in their position.
In the world of real estate, there is never a reason to burn your bridges.
Things to Consider when Rejecting an Offer
Rejecting an offer at full price is not a decision you should take lightly. If you are considering rejecting a full-price offer, you should first look at your listing agreement. The listing agreement states what happens if you reject a full-price offer, including your rights, responsibilities, and the possible need to pay your real estate agent.
Both buyers and sellers regularly back out of real estate sales every day and take their homes off the market. Whether you will still need to pay your real estate agent, any commission will depend on several factors, including your state’s laws and the contract you signed.
In some cases, you might have to report the rejection of a full-price offer to the multiple listing service (MLS). In an extreme case, a buyer’s agent may see that you rejected a previous offer and therefore decide not to entertain your home as a possibility for their client. Consequently, you lose the opportunity to show your home to future buyers and limit the potential for future offers.
Conclusion
Sellers have the right to reject any offer on their house, whether it’s at or above the asking price. If you are considering declining an offer, you should remember that you may have to pay your agent a fee, and that rejection may have several consequences. There is no guarantee that you will receive a stronger offer down the line, and you should candidly consult with your agent to ensure you make a move that best meets your selling needs.
