How to Bounce Back When Your Offer on a Dream Home Is Rejected
Today, buying a house requires more than a down payment, a steady income, and finding the home of your dreams. It takes perseverance, tenacity, and in many cases, more money than you anticipated.
The number of homes available for sale in the U.S. fell to a record low of 1.03 million in February, according to the National Association of Realtors. The pandemic spurred the fastest decline in housing inventory the U.S. has ever seen. The houses that have come on the market have been selling faster—often in less than 20 days. For buyers, especially in the most competitive real estate markets, that can mean facing several rejections before finally finding the one.
Set Realistic Expectations
Austin real estate agent Lilly Rockwell says she worked with one buyer who made 10 failed offers before finally landing a home. She tells buyers they should expect to lose multiple offers before having one accepted. "If buyers know what to expect, they're going to be less bummed out when they lose that offer," she says.
In a sizzling market like Austin, where deep-pocketed out-of-town buyers are driving sharp price increases, homebuyers might need to open their wallets wider, temper their expectations, or get creative. "This is not House Hunters. You're not going to be negotiating some amazing deal," Rockwell says. "It's more like the 'What can you do to make the seller the happiest?' game."
Prepare to Pay More
More money is a clear way to win that game, and Rockwell says she's seen a sharp increase in buyers making offers far above appraisal values. Favorable terms like leaseback periods, more earnest money, and bigger option fees (nonrefundable sums paid to sellers for taking a home off the market) can also help.
"With enough perseverance and flexibility, you will get that house," she says. "It's not necessarily going to be an easy road, and it's not for the faint of heart."
Focus on the Future
Like any road paved with rejection, the road to homeownership in a hot market is one that's likely to feel bumpy. Psychotherapist Amy Morin recommends aspiring homebuyers faced with disappointment lean into the sting, letting themselves feel uncomfortable after a rejection. "It's healthy for us to feel lots of emotions," she says. "You just don't want to get stuck there."
Instead of ruminating on your disappointment, Morin recommends focusing on what's next. After all, there are more real estate listings to scour, more neighborhoods to explore, and more homes to see. "It's not the end-all-be-all if you get rejected," she says. "It just means for now, you may need a plan B."
In New York, Brown Harris Stevens real estate broker Emma Kerins notes that it sometimes takes losing an apartment or two for buyers to realize the Big Apple bargains they seek might not exist. "You can be the winner, but you have to be realistic about price," she explains. "Don't be afraid to come in at the asking price."
Sometimes, losing a property isn't about the money. Cash buyers offer smoother deals and faster closings that borrowers with mortgages can't always compete with, Kerins says. She echoes the sentiment that perseverance is key—and she keeps in touch with sellers' brokers just in case deals fall through. "No matter what your price point, buying a house is one of the most emotional things you'll ever do. You have to be positive," she said.
Her advice to homebuyers? "Don't give up so fast."