While we experience the extremely low inventory in the price range for my first-time home buyers, we find ourselves having to compete with other buyers in the bidding process. Same is true for the buyers making an offer on my clients’ homes. In the old days, before I became a real estate agent, I was told that buyers and their agents used to have opportunities to present their offers in person to sellers. I have been selling real estate since 2010 and have always asked to present my client’s offer in person. It never happened. Instead, these days buyers are advised to write letters to sellers telling them about themselves, about the house, etc.
Does it work? Do you write a letter to the seller in a bidding war?
There are two schools of thoughts. One predicts a letter like that just makes negotiating with sellers harder down the road. After all, if the buyer really loves the house so much as the letter says, he should be willing to pay more for it. The other says, as a real estate agent will often testify, it works. The seller who lives and is attached to her house would love to know that the new owner will enjoy the house as much as she has. I have seen it both ways. There are so many moving parts in a bidding war. With everything being equal, a letter to the seller, professionally and sincerely written, will only help. However, if it is written to manipulate seller’s decision in negotiation, it can backfire.
So here are some tips for writing a letter to the seller:
- Know what is important to the seller. Do your homework. Has the seller lived in the house? How is it like for the seller living there? Does the seller need a quick close or time to find a place to relocate? Is the seller a gardener leaving behind his plants? What is the seller’s occupation? Has the seller have children or raised them in the house? What is the seller most proud of about the house? Do you have anything in common? Does the seller have resources to make the repairs needed? If you can make the task of selling/moving easier for the seller, honor the seller’s memories, have something in common, or promise to take care of the house, by all means, communicate that in your letter. A few points will do — no need to write an essay.
- Tell the truth. Don’t say it’s a perfect house and then later point out what’s wrong with the house to get a price reduction. That doesn’t mean you shouldn’t negotiate or keep certain information confidential. The seller will understand that what you love to do is not always what you are able to do and that people do change and so do the circumstances. However, don’t say anything that you are not willing to back up with your offer and pre-qualification for a mortgage.
- Be objective. This is why I usually write the letter to the seller on behalf of my client. A letter, not overly emotional, can still be sincere and effective. Include some facts to give the seller something to reason with and set the stage for future negotiation. Those facts are most likely no surprise to the seller. You are just letting the seller know that any reasonable buyer will have the same opinion or obstacle, no matter how much he loves the house.
- Be creative when it’s appropriate. Whether to be creative depends on the seller and the type of the properties. Artist retreat? Unique neighborhood? Children at home? Horse property? Pet-friendly lot? Some buyers send a video; some send their kids’ drawings. There is no right or wrong way of doing it but make sure you know your audience.
- Be brief and to the point. Just like that.
As we are entering the home-buying season in Metro Phoenix, I wish you the best in getting the home you love. But remember — no matter what is said in your letter to the seller, don’t fall in love until you have the key to your dream home in your hand.