We\u2019ve all faced the sting of rejection \u2014 that big, fat \u201cno\u201d has hit us hard, from the college acceptance letter that never arrived, to the romantic feelings that turned out to not be mutual. Even in the pursuit of homeownership, rejection makes an unwelcome appearance.<\/p>\n
After passing the stress test and saving for a healthy downpayment, getting the keys to your first home is still out of reach without first having your offer accepted by the seller. The process of submitting offers and taking part in bidding wars inevitably leads to rejection for some. Not every buyer can win, yet it still hurts when your offer isn\u2019t the one.<\/p>\n
\u201cMRI studies actually show that [the] same areas in our brain become activated when we experience rejection as we experience physical pain, so there\u2019s a strong feeling that we get,\u201d says Ashley Kreze, a registered clinical counsellor and psychotherapist based in Vancouver.<\/p>\n
As Canada\u2019s largest housing markets remain unaffordable for many prospective buyers, the desire to own real estate is still strongly felt. A 2018 report conducted by the Canadian Real Estate Association found that 86 percent of Millennials want to own a home someday, while six in 10 Millennials rated housing affordability as a top or very high priority for the federal government to address. This desire to participate in the roles of homeownership is what makes offer rejection so painful. As Kreze explains, the need to belong is a social instinct rooted within human beings. Being rejected from the rest of the group, and rejected from our ability to participate in homeownership, creates a painful emotional response.<\/p>\n
\u201cFrom an evolutionary perspective, being part of the group, being part of the tribe, meant survival,\u201d says Kreze. \u201cSo rejection kind of hits us hard when we feel it in today\u2019s world, even though from an evolutionary perspective, we may not have the same perceived threats around us. We still get that response.\u201d<\/p>\n
While we can\u2019t completely unwire our mind\u2019s reaction to rejection, there are ways to lessen the blow of offer rejection: finding emotional coping mechanisms, or creating good strategies that will improve the odds of getting your offer accepted.<\/p>\n
\u201cAt the end of the day, it\u2019s what the seller wants, but it\u2019s also what the buyer\u2019s willing to pay or willing to do to get that property,\u201d says Derek Ladouceur, a Toronto-based real estate agent with Re\/Max Hallmark Realty.<\/p>\n
If you\u2019re working on your first offer, or have felt the pangs of offer rejection before, Ladouceur and Kreze have some advice on how to make offer rejection work to your benefit.<\/p>\n
Get your ducks in a row<\/strong><\/p>\n When placing an offer on a home, you\u2019ll find yourself in one of two camps: the property has been on the market for a little while, or you\u2019re one of several buyers lining up with offers to present on a specific date on a property that\u2019s been freshly listed. The camp you fall into will dictate how much pre-planning is required ahead of your offer submission.<\/p>\n If your property has been on the market for a few weeks, Ladouceur says that you\u2019ll have the luxury of time to place conditional clauses in your offer \u2014 provisions that once they are completed within a set time frame will allow the offer to become fully accepted by both parties. An inspection finance clause, for instance, allows the buyer to examine the condition of the property while the home is tentatively sold to them. If the inspection clause isn\u2019t fulfilled or the inspection brings up questionable result, the offer could fall apart or be renegotiated.<\/p>\n \u201cIf you\u2019re putting an offer in on a property and they\u2019re not holding back offers and it\u2019s a property that\u2019s been on the market for a little bit, you can go into it with eyes wide open,\u201d says Ladouceur. \u201cYou can take the time to make sure your financing is in place by putting a financing clause in. You can make sure that even if they have a home inspection\u2026 [you can] put in a condition for that as well.\u201d<\/p>\n However, if you\u2019re heading into a multi-offer bidding war, it\u2019s best to have home inspections and mortgage approvals complete ahead of time. In a bidding war, the seller is in the driver\u2019s seat: they\u2019re likely to choose the offer that gives them the best price and the most assurance of a firm sell. Placing a conditional offer on the table next to offers that have fewer strings attached could make yours appear less appealing.<\/p>\n \u201cIf people are holding back on offers, and there are multiple offers, and you go in with a financing clause and then a home inspection clause, there\u2019s probably a good chance that you\u2019re not going to get it because there\u2019s going to be someone else that doesn\u2019t have those conditions in,\u201d says Ladouceur.<\/p>\n Ladouceur says getting a mortgage pre-approval and ordering a home inspection ahead of the presentation date saves you from adding clauses into your offer, which could spare you from rejection.<\/p>\n \u201cThat\u2019s why I always tell clients [that] if you see something you like, we have to move on it,\u201d he says. \u201cIf this is something that you think you\u2019re going to like, then we need to move on it now so that we can get everything organized and ready, so that on offer night, we\u2019re 100 percent comfortable with what we\u2019re doing.\u201d<\/p>\n Make the best ballpark offer<\/strong><\/p>\n While conditional clauses can make you seem less desirable in an offer presentation, they serve an important purpose. A home inspection can spot deteriorating foundations; a financing clause could spare your from mortgage payments that could render you house poor. However, clauses that aren\u2019t pertinent to the sale of the house, Ladouceur says, can be left out in multi-offer scenarios. Placing extra expectations on the seller, like requesting that the house be professionally cleaned prior to buyer occupancy, can put a seller off and cause them to reject the offer.<\/p>\n \u201cWhen you\u2019re a seller and you have six offers in front of you, you kind of hold the cards, not the buyer,\u201d says Ladouceur. \u201cYou kind of have to limit yourself and not throw of these demands on the seller, because they seller can just turn around and say, \u2018Yeah, this isn\u2019t going to work for me, I\u2019m just going to take the other offer.\u2019\u201d<\/p>\n In a bidding war, you could have the best offer: the one with the highest price and the lowest number of conditions, but anything as minor as your closing date being far out could convince the seller to consider the competition. Ladouceur stresses that getting in to see the property prior to the offer date will allow you to get the information you\u2019ll need for writing an appealing offer. A pro-active buyer\u2019s realtor, Ladouceur says, should build rapport with the listing agent to gauge what the seller\u2019s offer expectations are. A listing agent won\u2019t straight up offer what the seller is looking for, but should give you a ballpark guess.<\/p>\n \u201cYour realtor needs to go to the seller\u2019s realtor and say, \u2018Listen, what is your ideal closing date?\u2019\u201d says Ladouceur. \u201cAll [of] those kinds of things need to be answered immediately so that you know, and your buyer knows that, \u2018Okay, this is what we\u2019re working with.\u2019\u201d<\/p>\n Re-evaluate and rejuvenate<\/strong><\/p>\n Even if you put in all of the legwork and research you can, your offer may still be rejected. If you encounter rejection from multiple properties, Ladouceur and Kreze say that it may be time to re-evaluate.<\/p>\n Searching for a cheaper home in the next community over from your ideal location could be a strategy for offering a better price in the next round of offers, says Ladouceur. Adjusting your expectations for size or finishes may also be necessary. If you\u2019re not winning offers, Ladouceur recommends asking your realtor what you could be doing better. If they don\u2019t have answers, he says it might be time to work with someone else.<\/p>\n \u201cYou shouldn\u2019t be losing out on multiples over and over again. If that\u2019s the case, then it\u2019s one of two things \u2014 your realtor doesn\u2019t know the area, or you are not allowing your realtor to do their job by saying, \u2018This is the price point that we need to go to.\u2019\u201d<\/p>\n Talking to a loved one or opening up to someone about a refused offer, Kreze explains, can soothe the pain of rejection. Reducing self-criticism and practicing self-compassion are good strategies for lessening the effects a disappointing rejection can inflict. Rejection is painful, but it can be used as a reset button when things don\u2019t go as expected to determine if we\u2019re on the right path.<\/p>\n When making decisions, Kreze says you want to make sure that there are smart goals attached to it. If you\u2019re reaching for something that is unattainable in the current circumstances, such as buying a house in an expensive market, she explains, it may be time to reconsider.<\/p>\n \u201cTry to keep things in perspective about what it is that we\u2019re working towards in reevaluating our expectations along the way and say, “Okay, perhaps the markets have changed, where are we today and what\u2019s within reach for my needs and my wants?”<\/p>\n