Surviving Unsuccessful Offers

Minneapolis, MN:  It is no secret that buying a house in today's market can be a challenge with the low inventory of homes for sale, and having to make multiple offers before successfully buying a home.

Falling in love with a home, and then having your offer rejected is no fun, and if you've been through a few rejections, definitely discouraging.

Here are a few thoughts to mentally stay in the game, and potential options to make your offer stronger. 

Remember, it's not really 'you' that is getting rejected.  In a multiple offer game, especially these crazy 10, 15, 20+ offer homes, being the winner is tough, especially for first time home buyers with limited funds. Understanding the market and having realistic expectations helps.

With your agent, try to obtain feedback of why your offer was rejected. Somethings maybe you can change for the next offer that may help, some maybe not. For example, competing against a cash offer is always tough when you need to get a mortgage loan (like most of us).

Are you willing with other helpful items, for example willing, to forgo an inspection, or willing/able to cover any difference in cash between your offer price and the homes appraisal? Not everyone can, and not everyone should.

Having your existing home sold, so you can make a non-contingent offer is also helpful. Only around 30% of current home buyers are currently first time home buyers. The other 70% of people have a home. A few can afford to buy the new home without selling the old home. A few can get creative, like borrowing from your 401k to make a deal work, and pay if back when your existing home sells... But most people can't.

Talk to your Loan Officer about other loan options. Your Loan Officer will always put you in the correct loan from a financing stand point, but that loan may handicap you when making an offer.  For example, while an FHA loan if a great loan, and there is nothing at all wrong with it, there is a perception with Real Estate Agents that it is sort of a second class offer. Switching to a conventional loan if possible, may improve your offer chances. The same with the awesome VA home loan. It is a fantastic loan, and a true benefit to our U.S. military personal, but agents, because of persistent misunderstanding

Finally, at the end of the day, understand that every single one of my clients, regardless of the number of unsuccessful offers along the way, have eventually found a perfect house they love, and you will too!