An out-and-out rejection of an offer is fairly rare. Once the seller rejects the offer, you will have to present another purchase agreement if you still want to pursue purchasing the house. In a normal situation, the sellers decline an offer by presenting their own counter-offer to the buyer. The sellers often do this by simply amending the original purchase agreement with terms that are important to them.

Find out what the problem was with the offer. Generally, a rejection is the result of a very low offer or unacceptable terms.

If it is a price issue, you will have to decide whether you want the house enough to go higher and prepare another purchase agreement to that effect.

If the problem is a terms issue, such as being contingent on the sale of your current house, check out all viable options (extended settlement, bridge financing) to see if you can remove the contingency. If you can, prepare another purchase agreement to reflect new terms.

If you are still pretty far apart, some strategies include:

Matching the seller move for move. For example, the seller counters back at $2000 below their list price. You counter back at $2000 above your offer price.
Giving up something else to get your price. For instance, you want to settle in 90 days, but the seller wants 60. Agree to 60, but only at the lower price.

Put a contingency in the counter that the Good Faith deposit will not be deposited into the closing agent's escrow account until all inspections have cleared. Another tactic is to offer a smaller deposit with the contract and pay an additional deposit when the inspection contingencies have cleared.

If you have enough cash to buy the house without closing cost help, leave your price alone and drop out all or part of the closing cost contribution.

If you are in a good market and there are many buyers, sellers will be less likely to take their house off the market contingent on the sale of your house. In other words, there is a high likelihood that the sellers will get an offer that is not contingent on another sale. Of course, if you live in that same market, that could mean your house will sell quickly as well. If you think it will, you can always take the risk that it will sell it in a reasonable time, but be prepared to carry both payments in the event that your house does not sell right away.

Qualifying to carry both houses
You may need to qualify to carry both houses, but if your old payment isn't too high and you don't have much debt, it's very possible. If you can qualify to carry both houses, you can try to stretch the closing date on the new house into the future to allow you more time to sell your house. That way, you hopefully have the time you need and the sellers have a guarantee that they will close on their house even if you don't sell your current home.

The total costs associated with carrying both houses have to be considered. You are basically agreeing to pay that much more for your new house, so make sure you can afford it. If you are truly convinced that this is the home for you, do the math and see if taking the risk is worth it. Your options depend on whether you need the equity in your old house for the down payment and closing costs on your new home.

If you have other assets to use for the down payment on the new house

If you need the equity in your home for down payment on the new house

Think about borrowing a minimum down payment for the new house from your 401k or retirement plan. Repay it when you sell the house.

Borrow against a stock account rather than cashing it in for the down payment on the new house, to avoid capital gains. Repay the loan when you sell the house.

Obtain a "bridge loan or swing loan." This is a loan against the equity in your old house to be applied to the purchase of a new house. In this case, you will need to qualify for costs to carry both houses as well as some bridge loan payments.

If you don't qualify to carry both houses
If you don't qualify to carry both loans and you want to try to make the deal work, offer the seller more information about your house. Provide your research on the comparables and the market. Let the seller know that you are pricing it to sell and your plans to aggressively market it. The seller may even want to visit the house to see if it is in good condition and in a desirable neighborhood.

Ask the seller to accept your contingent offer, but add a "kick-out clause." This means that they will leave their house on the market, and if they get another offer, you will have 24-48 hours to prove that you can perform on your contract without selling your current home, or you get "kicked out" and get your deposit back. The sellers are then free to negotiate with the new purchasers.

When a seller accepts a contract contingent on the sale of the buyer's current house, they usually put a timeframe around it, even if you have a kick-out clause in the contract. For instance, the seller might give you 30-60 days to get a firm contract on your house and 30 more days to close the transaction.

If you are not using a real estate agent, we highly recommend that you hire a contract attorney when you are dealing with complicated situations such as this.

One option: settle on your timeframe, but rent the house back to the seller for the timeframe they need. Usually, the seller would pay a daily rental rate that is equal to your new PITI payment.

Another option: if you can wait to settle, agree to delay settlement. You may be able to negotiate more favorable price or terms if you accommodate the seller.