The Etiquette of Refusing a Home Purchase Offer

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By Clever Real Estate Updated August 8, 2022


Woman wants to refuse home purchase offer

When selling your home, you may receive purchase offers that are less than desirable. Many wonder what the etiquette to refuse home purchase offer is — and rightly so! As a seller, here is the right way to decline the offer.

Reasons to reject an offer

Remember: You don't have to sell your house. Financial and health issues aside, your house is still yours until you accept an offer and you’re under no obligation to accept any offer.

Now, without further ado, here are some reasons to reject an offer.

Lowball offer

If you or your listing agent has done their homework well, you priced your house according to what comparable houses in your area are selling for. That price is one most people consider fair. Any offer asking for 30% off your listing price is considered a lowball offer.

Many potential buyers plan on negotiating a price and enter the bid with a low offer, just to see if you'll accept it. Sometimes, these low offers don't come in the form of a low number, but rather they ask for a number of concessions from the seller.

Concessions are any requirements the buyers or sellers must complete before the house closes. These concessions (often in the form of contingencies) can be in the form of the condition that the buyer's house must sell first, the house must pass an inspection, or the house must appraise for the offer price.

While you do not always have to reject a lowball offer or turn away offers with contingencies attached, you should consult with your real estate expert to completely understand the terms before accepting these types of offers.

Questionable funding

A buyer that plans on using a loan to fund the purchase of your house will often include a pre-approval letter from their lender proving they are eligible for a loan of that amount. A pre-approval letter (while not required) gives the seller peace of mind about the house closing if they accept this offer. If the seller has any reason to doubt the funding of the potential buyer, they will usually turn down the offer.

Receiving a better offer

In competitive markets, sellers will often wait until they have several offers submitted before accepting one and rejecting the rest. In instances like this, homeowners usually won't provide much of an explanation as to why they rejected the offer.

Prejudiced against loans

Some homeowners will reject your offer if you’re using a certain type of loan, such as an FHA loan. While these loans are not inferior to other types of loans, the listing agent may prefer to work with other types of loans that may have less stringent home buying stipulations and poison their clients against them.

Before you reject any offer based on the loan type alone, do your own research! You may find out that you’re perfectly fine with the loan option you got initially.

Should you counter offer?

Often, when home sellers receive an offer they don't quite resonate with, they'll propose a counteroffer. Just because sellers do propose a counteroffer doesn't mean you should all the time, however. You’re well within your rights to just say no.

If you’re using a listing agent, however, you'll want to have a reason for saying no. Your listing agent is under a contract with an expiry period and is working hard to get your house out the right market. If you’re wondering if you should accept or counter an offer, stay in touch with your listing agent and ask their advice.

» MORE: Real Estate Counter Offer Etiquette for Buyers and Sellers

Is it illegal to refuse to sell to a buyer?

It is not always illegal to refuse to sell to a buyer, but there are a few instances where saying, "No, thank you," is not acceptable. Those reasons are if you’re discriminating based on age, sex, religion, race, sexual orientation, disability, or any other discriminatory reason as outlined in the Fair Housing Act.

Proper etiquette to refuse home purchase offer

If the buyer is not the right fit for your house, there are a few ways to refuse their offer appropriately with etiquette.

Get back in a timely manner.

Whether you want to counter or not, if someone submits an offer that you aren't satisfied with, don't just leave them hanging. Respond to them before their offer expires (it typically says when this is on their offer). Simply letting their offer expire is something most consider rude, and a sure way to make sure the buyer won't offer again if you don't receive any other offers.

Refuse with a counter offer.

If you want to counter their offer, have your listing agent cross off the original offer price on the Purchase to Sell agreement and send it back. This document can get rather messy depending on how many times it gets passed back and forth. Prevent this by asking your agent to reach out to theirs with your best offer.

Refuse outright.

If you’re certain that you don't want to entertain any offer from the potential buyer or don't want to counteroffer, have your agent reach out via email with a simple reply of, "My client does not accept that offer." It doesn't have to be extravagant to get the job done well.

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Need a top-notch real estate professional to help you turn down an offer on your house? You need Clever. Clever Partner Agents provide you with the top level of service for a low flat rate. Call us today at 1-833-2-CLEVER or fill out our online form to start.

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