Found the perfect property, but the seller won’t budge? Here’s why some owners refuse to sell off-market properties.
You may already be familiar with ProspectNow’s likely seller feature – a cutting-edge algorithm that predicts which off-market properties are likely to sell in the next twelve months. Or perhaps you’re an investor driving for dollars in search of homes marked “for sale by owner.” But sometimes, you’ll struggle to make that sale. There are a few reasons why owners would refuse to sell their properties, and most of the time it’s within your control to change. Read on to learn why some off-market property owners refuse to sell.
1. You Offered Too Little
Owners don’t want to take a loss on their properties, especially if they’ve put years of time and improvements into their homes. If you pitch an offer that’s below the current market value, chances are good that the seller will reject it. Lowballing the owner at the beginning will likely insult them. It’s good practice to offer around market value for a property. The seller accepting a low offer may do so out of necessity, but don’t count on it.
But there’s more to an offer than the bottom line price. Another way to insult the seller and make them more likely to reject your offer is to include too many concessions. These closing costs can include property taxes, title insurance and certain fees. Seller concessions are agreements that the seller will pay some or all of your closing costs. It’s a way for you to save money and make the transaction easier, but it obviously eats into the seller’s earnings. Asking for too many of these concessions has the same effect as giving a low offer at the start.
Sometimes, the seller has high expectations for their property. They may not take into account market fluctuations, particularly if the market value for their home fell since their initial purchase. Or, perhaps they’ve overestimated the value of certain improvements. An appraisal may remedy any false impressions, but ultimately this may not be an issue you can solve. In this case, you may need to move on to the next off-market property.
2. The Owner Doesn’t Trust You
Sometimes a seller can reject your offer if they have concerns about your ability to finance. Sellers don’t want to accept a promising offer only to have the sale fall through because the buyer couldn’t get a mortgage. To avoid wasting the owner’s time and yours, make sure your financial ducks are in a row before making any offer on an off-market property. Take the time to research the different types of mortgages and how to qualify for one.
3. Seller’s Remorse
You may also find that the seller backs out of the sale entirely, opting to stay put rather than move. Maybe they have a case of seller’s remorse, or perhaps the home they were looking to buy fell through. The latter is a distinct possibility in a volatile housing market. In this case, there isn’t much that you can do as a buyer except to move on.
4. Navigating Counteroffers
You may encounter a situation where the seller likes your offer, but with the modification of some details. Perhaps they want a little more money, they object to some of your concessions, or have contingencies to add. They need not reject your offer outright, but can instead send you a counteroffer. You do have the option to counter the counteroffer, and there is no limit to the number of counters that can go back and forth.
About ProspectNow
ProspectNow gives you the tools to find off-market properties before they list. With the likely seller algorithm, you have a better chance of finding properties that will hit the market soon and reach those owners before another prospective buyer can. It’s an important tool for any investor in search of off-market properties, with valuable data offered at a lower price than competing real estate platforms. This data doesn’t just help you find a property, but assists in valuation and helping you make the perfect offer. All that’s left for you to do is find your ideal property and make that offer to the owner.
Are you ready to close more deals and make more money? ProspectNow has industry-leading data analytics for off-market properties all across the country. Sign up for your free trial today and find out how much more money you could be making.