It’s not always easy going through the process of buying land. There’s the stress, anxiousness, and uncertainty that you have to grapple with throughout the process of making offers and closing land deals.
Even if you’ve found the property you think is best for you, there are times when the seller might reject your purchase offer. In such a case, you’ll likely get disappointed because you really the property or your itching to get a deal going. As any land buyer knows, finding the right deal takes time and effort.
Land sellers can reject an offer for several reasons. Most of the time, they’ll tell the buyer this and that, and sometimes they can reject the offer without giving you any grounds for their decision. There are four common reasons your land offer might get rejected by the seller, and we’re going to talk about them in this article.
You Gave a Low-Ball Offer
It’s not uncommon for land buyers to give an offer that’s way below the asking price or fair value of the property. Such a proposal is called a low-ball offer, and, understandably, a particular land seller will decline it if they are not strongly motivated to sell.
Most sellers may even find it insulting to receive low-ball offers from buyers. When they feel this way, they will opt not to reply to your offer or may downright get offended by it. As many investors may know, sellers can have some less than kind words in response to a low-ball offer.
Now, you should avoid this situation by educating yourself on the market value of subject properties. It’s also a must to have an excellent real estate agent that can tell you about the comps that are selling in the area. In this way, you can avoid the disappointment and frustration of getting your offer rejected.
Your Offer Has Lots of Contingencies
Buying a real estate property requires you to include contingencies to ensure that you’re not getting the short end of the stick. For example, you can demand the seller to fix something on the property or allow a property inspection.
However, you should see to it that you don’t include too many contingencies in your offer. Even if you give a reasonable price for the land, but you have many contingencies included in it, you might still receive a rejection from the seller.
Land sellers can have some doubts about the success of the sale if they have to satisfy many contingencies. They would think that such instances can result in dragging out the escrow. And if the contingencies are not fulfilled within the desired time frame, it can mean delays and a more extended closing, which can be a deal killer that ties up a seller’s property.
That’s why instead of accepting an offer that includes too many contingencies, they may look elsewhere for another buyer that won’t put too much of a hassle for them.
The Seller Wants a Faster Closing Date
The closing date is another factor why land sellers reject a purchase offer. Yes, there will be a negotiation between the buyer and the seller when it comes to this component of the land buying process.
Most closing dates can go as long as 60 days, but not all circumstances are similar. A buyer might ask the seller for a closing date that’s beyond this time frame, while the seller wants a shorter closing date. If they don’t reach a compromise, this issue can prompt the seller not to pursue the deal.
So, before you submit your offer, it’s crucial to determine the type of closing date that the seller might approve. It’s pointless to provide an offer with a closing date of 60 days if the seller wants a quick closing. Long closing dates are unattractive to sellers, so make sure to provide as short a closing as possible.
You Don’t Have Mortgage Pre-Approval
Another thing that can turn off land sellers is if the buyer doesn’t get pre-approved for a mortgage. This means that the lender hasn’t yet completed an in-depth evaluation of the buyer, and this can be unattractive to the seller.
So, ensure that you get a mortgage pre-approval before you submit a purchase offer. In this way, the seller will be at ease that you can take out a mortgage for the property you want to buy.
Yes, there are valid reasons why the seller rejects your offer to buy his/her land. If you don’t want frustration and disappointment, make sure that you submit a solid offer, have your finances in order, offer a reasonable closing date, and don’t put too many contingencies in your offer. Keep in mind that many offers are rejected, and it’s not a reason to get discouraged, there are plenty of properties out there. Patience and persistence is the key to getting good land deals.May 25, 2020