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A lot of energy goes in to making an offer to buy a home. So it's a big let down if you lose out to another buyer in a multiple offer competition. It's also disheartening when a seller rejects your offer even though it was the only offer.
It's natural to feel discouraged, but don't give up. If you're intent on buying a home, use the experience to learn how you can maximize your chances of success the next time.
Start by finding out what went wrong. Ask your agent to talk to the seller's agent to find out why your offer didn't work. If there were multiple offers, how many offers were there? Why was your offer rejected? Was it the price? Were the terms unacceptable? How much did the listing sell for? Were there any unique aspects about the winning offer, such as a very short close or a lack of contingencies?
The seller's agent may be reluctant to divulge the selling price until the transaction closes. Sellers often prefer to keep the price confidential until the deal is done. But, you can probably find out if the successful offer was for more than the list price. And, if so, the listing agent might indicate whether the offer was for a little more or a lot more than the asking price.
Find out how your offer ranked in a multiple offer competition. If there were five offers, and you came in last, use this as a reality check. If you offered at the top of your price range, and the market is very competitive, you may need to scale back your expectations. When over-bidding is common, you may need to look at homes that are priced under the maximum you can afford. That way you can offer more if you're in competition.
Pat yourself on the back if you came in second out of five or more offers, particularly if this was your first offer. You obviously have a feel for current market value. The next time or two, you'll probably be the successful bidder.
HOUSE HUNTING TIP:
If the seller rejected your offer, and there were no other offers on the table, you might be dealing with an unrealistic seller. Ask your agent to find out why the seller is selling. Some sellers will sell only if they get a certain price. If the seller's only motivation is price, and his price is unrealistic, find another home that you can buy for a reasonable price.
However, if the seller is truly motivated, a waiting strategy might be your best approach. Motivated sellers don't just want to sell; they need to sell. They may have purchased another home. Or, there may have been a death in the family, a transfer to another location or a divorce. If the seller's price is too high for the market, it will probably be reduced in time.
Ask your agent to stay in touch with the listing agent. The best time to make an offer on an over-priced listing is often just before the price is lowered. If you wait until the price is reduced, you might encounter competition from other buyers.
To put yourself in the best negotiating position, get preapproved for the financing you'll need. If sellers in your area aren't accepting offers that are contingent on the sale of another property, sell your home first so that you won't need this contingency. Or, if you have the financial wherewithal, arrange for interim financing so that you can buy before selling.
THE CLOSING:
From a seller's standpoint, the fewer contingencies, the better.
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