When It’s Best To Turn Down a Buyer’s Offer or Not Proceed With a Real Estate Transaction

Selling your home can drag on if you don’t have any buyers willing to make an offer. Sometimes, the road to closing faces delays because you need to decline the offer on your home. How often does this happen, and why?

This guide breaks down different situations when it's best to turn down a buyer's offer. Learn why real estate professionals recommend declining certain offers and what that means for you going forward. 

Consider the Price

A real estate transaction is one of the largest purchases someone can make. As a seller, you have the right to hold off on offers that don’t meet your financial expectations. Here are a few instances when the money involved impacts your decision to turn down an offer. 

Decline a Lowball Offer

You don’t want to sell your home for less than you know it’s worth. Some buyers think that putting in a lowball offer will work in their favor, but rarely does this end up being the case. Your real estate agent can estimate a fair value of your home based on the following factors:

• Location
• Home size, layout, and features
• Recently sold properties in the area
• Market trends

If the offer someone presents isn’t up to your standards, turn it down and wait for a better one to come along. 

Evaluate the Buyer’s Earnest Money

Say you have two offers within the same ballpark, but one buyer puts down 5% in earnest money while the other deposits 1%. Earnest money, also called a good faith deposit, rightfully belongs to the seller if anything causes the sale to fall through. Buyers who put down a low amount have fewer financial risks of losing the sale, which could mean they aren’t as serious about it. 

In this example, it’s wise to turn down the offer with the 1% deposit versus 5% since a higher deposit means a greater chance of closing the sale. 

Recognize Red Flags Regarding Potential Buyers

How do you know when it’s best to turn down a buyer’s offer? Listing agents can warn their clients of a few red flags in prospective homebuyers. 

They Have Too Many Contingencies

Buyers can list contingencies in their offer as a “get out of jail free card” to walk away from the contract. Contingencies may include items like:

• Receiving a good report following a home inspection
• Buying the home with certain appliances or furniture included
• Having the seller pay a portion of the closing costs
• Requesting repairs 

The buyer can easily walk away from the sale if they have many contingencies, which is why experts recommend turning down offers like these. 

They Show No Pre Approval Letter

Buyers can prove they’re serious about closing on a home by receiving a preapproval letter from a lender. Unlike pre-qualification, pre approval consists of more steps and shows the buyer is ready to secure a home loan. Many people include their preapproval letter in an official offer, so if you receive one without this documentation, it’s wise to turn it down. 

They Delay the Closing Date

Home sales normally close in 30 to 60 days. Anything beyond that means your chances of closing are slim to none. That's when it's best to turn down a buyer's offer.

The Bottom Line

Now that you know situations when it’s best to turn down a buyer’s offer, you’ll be in a good position to sell your house to the right buyer. Trust the team at Odigo Real Estate Club to buy or sell property in Washington State.