Why do offers get rejected?
This is an important thing to listen to because we're out competing against other offers all the time now. It's almost always a multiple offer situation and your buyers want to know why they lose.
The first thing you have to realize is that about 21% of the buyers that are out there in the market are cash buyers. That's the latest stats from NAR. That's a little bit up from where it was a few months ago, but it's not like it's all the buyers. Only 21% of the buyers are cash buyers. So that means of 10 buyers, two might be cash buyers. Something to be aware of is that when you're competing with a cash buyer, it can put you at a disadvantage. But it's not the only thing that sellers are considering.
A recent study that was done by NAR found these were the biggest reasons why people's offers were rejected:
1. A low offer
They didn't offer enough compared to the competition. It was not because it was cash or not cash, it was strictly based on price. And this made up 34% of the time why they rejected the offer.
2. They got a cash offer
So this can impact it, but price was more important. You can trump cash buyers with price and that's something you should be encouraging your clients to understand.
3. Non-contingent offers — people taking inspections off the plate, taking appraisals off the plate, or having the appraisal-gap conversation so that we make sure that we're reducing the number of contingencies that are on the table.
Of course, that comes with risk and we need to have that risk-reward conversation. Make sure that you've talked to your brokerage or brokers about it. Make sure your buyers are comfortable, but in a multiple offer environment, it's definitely something you should be considering
4. Offers with a bigger down payment
A lot of agents get in a bad habit of not showing their down payment — even when they have a strong one. Show that down payment! This accounted for 10% of the offers being rejected — one buyer had a bigger down payment than the other. Show that off if you've got a big down payment.
Those are the top 4 reasons why offers have been rejected.
So think about that, strategize around that, and get your buyers in a position to win more often.
If you'd like to discover more ways to win in multiple offer situations, I have a great, free webinar for you to check out called 10 Ways To Win In A Multiple Offer Situation here.
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