As a seller, you can technically sell your property to anyone you want, including friends and family. However, when listing your home on the market, you may not have complete control over the buyer.
Additionally, it is illegal to discriminate based on race, religion, gender, or national origin, and in some cases, sexual orientation. But there are a few legal reasons to refuse a buyer’s offer.
3 Legal Reasons to Refuse an Offer
You can work with an attorney or real estate to discuss reasons you can legally refuse an offer on your home. But, for starters here are three reasons you can use to reject a buyer.
- The offer is too low
If the buyer is offering a price below the market value of your home, then you can reject their offer. You will probably want to wait for another buyer who can pay the full value so that you do not have a loss. However, a low offer is better than a deal that falls apart, so you should also make sure the buyer is preapproved.
- The buyer is not eligible for a mortgage
If you suspect that the buyer will not be able to get a loan sufficient for the offer, then you can refuse them. For instance, if a buyer has a poor credit score or cannot obtain a loan, then you can lawfully refuse them.
You don’t want their offer to fall through, so if they cannot prove that they can get a loan you can deny them. You can let them know that if they obtain a loan commitment you can consider their offer.
- You want to take your house off the market
If you decide to keep your house rather than sell, you have the right to refuse an offer from anyone. You do not legally have to sell your house just because you listed it. However, if this is your reason for refusing to sell to a buyer, you cannot just sell to someone else.
Reasons You Cannot Refuse a Buyer
You cannot choose who buys your home based on discriminatory factors, otherwise, you could face legal action. Under the Fair Housing Act, a homebuyer’s race, sex, familial status, religion, and national origin are protected. In some states, the law also prevents discrimination for sexual orientation.
If you violate the law by refusing to sell based on one of these factors, you can face serious penalties and a lawsuit.
Choosing Between Multiple Offers
If you get multiple offers on your home, then you can select who you sell your house to based on the price, timing, and any concessions the buyers have requested. You can also let the buyers know that you have multiple offers and ask them to provide their best offers. Alternatively, you could just accept offers based on first-come, first-serve to ensure you get an offer.
If price is the most important factor in your choice, then you may just go with whoever has the highest bid or the highest cash offer. However, when calculating which offer will bring you the most profit, take into account all of your expenses. Keep in mind that you will still have to pay for fees, taxes, closing costs, and potential home improvements.
Speaking of home improvements, some buyers will ask you to make concessions, or price reductions, for repair costs, HOA fees, or closing costs. Concessions are not always bad, as they can qualify as a tax deduction and make a deal more appealing. However, if you have multiple offers to choose from, go with the buyer asking for the fewest concessions because it will make it easier for you and increase your profit.
The final consideration is timing. Typically, a seller’s goal is to close the deal as soon as possible. If you have multiple offers, you will likely want to choose the one ready to close in a few weeks, rather than a few months.
Ultimately, you do have quite a bit of control over who buys your house. While you cannot legally discriminate against protected classes, there are legal reasons to refuse an offer. In today’s market, you may get a few offers on your home and you have the right to choose between them. You may choose based on the profit you’ll make, concessions required, and/or timing.
A real estate agent can also guide you through how to choose who buys your house from multiple offers. They will be familiar with the market and the law and can help simplify the process of selling your home. But, ultimately, choosing the best buyer is up to you.