- Much at stake and much to do.
- The power of rejection.
- #1 – It’s “Too much house.”
- #2 – You have strong competition.
- #3 – You lack preapproval.
- #4 – You want to extend escrow.
Much at stake and much to do.
There is a lot on the line when you buy a house. Most of the stress is simply a matter of scale. No one needs to check your credit when you purchase a candy bar, because you don’t have to take out a massive loan to purchase it. Beyond the sheer size of a home purchase, there are also emotions involved – strong emotions related to one’s sense of identity and the notion of achieving the American Dream.
Plus, there isn’t just much at stake but several major steps to complete – strengthening your credit, finding the right mortgage, selecting the best agent, and going out to look at houses.
At the end of the day, you just want everything to move smoothly. Sometimes, though, it doesn’t. Sometimes you work carefully through the whole process, and your home offer gets turned down.
The power of rejection.
Probably the last thing you want to hear if you just had a home offer rejected is how powerfully rejection impacts your body, but understanding what’s going on can help you take care of yourself. Seriously, rejection hurts.
In fact, functional neuroimaging (the accepted method of tracking brain activity) has revealed that the part of the brain that’s at work following rejection is the same part of the brain that lights up in response to physical pain.
The processing of physical pain and social rejection is so similar that a common headache medication – acetaminophen, the ingredient used in Tylenol – is effective at decreasing the impact of rejection. That point is made by psychologist Guy Winch, PhD, author of the book Emotional First Aid: Healing Rejection, Guilt, Failure, and Other Everyday Hurts.
“In a study testing the hypothesis that rejection mimics physical pain, researchers gave some participants acetaminophen … before asking them to recall a painful rejection experience,” he says. “The people who received [acetaminophen] reported significantly less emotional pain than subjects who took a sugar pill.”
Solving the emotional headache is one thing. Why were you rejected, though? Here are four common reasons.
#1 – It’s “Too much house.”
Sometimes houses are simply too expensive. A realtor might want you to look at properties that are beautiful but just don’t make sense for your budget. Whatever makes sense to you in terms of a price range, stick to it firmly, advises finance writer Valencia Higuera.
“[A]fter looking at [pricier] homes, properties within your price range may lose their appeal,” she says. “In order to make a more expensive home affordable, you may submit a low-ball offer – which often doesn’t sit well with sellers.”
An offer that is excessively low (less than 75% of the asking price) can be irritating to the seller. Keep in mind that they have their own money issues. Out of the sale, there must be money for the agent, the current mortgage, and a down payment for their next property.
Be reasonable about what you can afford to protect everyone’s time, including your own.
#2 – You have strong competition.
You aren’t the only one looking for a house, remember. The seller may have a better offer currently in their hands.
You typically want to be close to the asking price, and you really don’t want to bid too far below what you are willing to pay if you are in love with the property – especially if there are likely other potential buyers.
“Never assume that other buyers will bid low,” says Higuera, “[A]nd even if they have, it only takes one person offering slightly more than your bid to knock your contract off the table.”
#3 – You lack preapproval.
Many sellers only want to look at offers from people who have been preapproved for home loans. Preapproval is a relatively simple process, and when it’s over, you actually benefit as well – because you know exactly how much money is going to be available to you through a mortgage.
#4 – You want to extend escrow.
People do not want the contract sitting in escrow for very long waiting for your down payment. Specifically, sellers generally don’t want to work with anyone who can’t close within a month, Higuera notes. “They’re undoubtedly ready to move forward with their life,” she says, “or they may need to sell quickly for other reasons, such as a divorce, an illness, job loss, or relocation.”
As you can see, there are various reasons why your home offer may have been rejected, and rejection really does hurt. However, there are plenty of other options out there.
If you want to look at different price ranges or just get back out and find new properties quickly, that’s the whole point of Realty.com. Select a city now.