As a home buyer, you obviously want to have a leg up when making an offer in a competitive real estate market. Traditionally – and logically – this entailed a stronger offer: more substantial deposit, higher purchase price, no conditions and/or a favourable closing date. But is it possible to put down a better offer on paper, only to lose out to another buyer?
There are instances where savvy Realtors have helped their clients beat out better offers – in some cases $10,000 better! – with a well-written letter from the buyers to the sellers. Sounds crazy, but if you’ve ever bought or sold a home, you know how emotional a process it can be. Just as buyers may overpay for a home they absolutely love, sellers may be open to choosing an offer based partly on an emotional plea from the buyer.
But does this tactic, while being 100% free, always make sense? Short answer: no. You have to really consider the context before sending such a letter. When it does work, this can be a great way of setting yourself apart as a potential buyer. That being said, there are plenty of situations where it really won’t make much of a difference.
If you do choose to write the letter, let’s discuss some key points of emphasis to consider.
Who is your audience?
Who exactly is the seller in this situation? If you truly love the home and want to put your best offer forward, you really have to learn as much as possible about the seller. How do you learn about the seller? Your Realtor will be the best possible bridge you have to them and their personal life. They’ll speak to the seller’s agent to find out who they are, where they’re from, why they are selling, what their situation is, and so on. In some cases you may consider the use of social media and Google searches to gain some additional insight. The more you know about them, the easier it will be to properly reach out and write a compelling letter to them.
Make an appeal to longer term owners
Sellers that have a family are typically a better audience when it comes to writing a letter. Those who have lived in a home for years, have built memories with their kids and have emotional ties to the house you’re interested in. By eliciting any emotion (obviously positive ones) you will find the letter can help in many situations. These sellers typically want to know who you are as a buyer: who will be living in their home, making new memories there, and how long do you plan on living in that property. Make an emotional appeal by writing a compelling and heartfelt letter. Let them know you don’t plan on demolishing the home, but rather, living there for years and making new memories while you’re there. All of these positive emotions will help build a tie with the seller.
Don’t waste your time if you’re dealing with investors
If the owner of the home has simply used it as a rental property for years, a letter typically won’t do much good, as they aren’t very emotionally attached to the house. The bottom line is what investors typically care about. So, it won’t do you much good to tell them how you plan on building a future with your family, these investors simply want to know how much of a profit they can turn when selling the home . If you’re dealing with investors, bypass the letter and simply submit your best offer possible. Since the letter is going to fall on deaf ears, you might as well try and make the best offer you can.
Build a connection
Do what you can to connect with the seller. When going to an open house look at the art or decor that adorns the walls and furniture. Any connection or tie you can make between yourself and the seller will help and work in your favor. When you connect, you learn who they are and what they like. If you notice trophies or memorabilia in the home, take a moment to discuss it. Discuss your mutual love of sports if you’ve played in the past for example. These ties might help make you a more memorable buyer, and will allow the seller to connect with you on a deeper level when considering offers on the home.
In competitive situations, you have to sell yourself as a buyer. So, take note, learn who the seller is, and do your research. With the right seller in a competitive situation, a well written and direct letter to the seller can make a world of difference. In fact, it may be what pushes you over the top when the seller is trying to decide which offer to accept on the home.