When you’ve found the house of your dreams and you’re ready to make an offer, how do you make sure your offer stands out? While the primary factor that determines which offer a seller chooses is financial (in other words, the price you’ll pay to live in the house), if two or more offers are comparable, an appeal to emotions may allow fate to tip favorably in your direction.
One tactic that many agents recommend for just that reason is writing an offer letter to the seller. When making such an appeal, however, there are many factors to consider — and even a few legal concerns to carefully navigate. Read on to learn more and discover how to write a real estate offer letter that will get you the house.
Why write an offer letter?
As it turns out, most sellers are human beings, and as humans, they favor a good emotional connection. The business of buying and selling a house involves a lot of paperwork and a lot of numbers, and if the seller has competing offers that all look pretty similar to each other, they may find themselves looking for some sort of sign or feeling as to which one is the “right” one.
A letter that helps the seller make an emotional connection to you by sharing a little bit about yourself and what you like about the property has the potential to make your offer stand out from the crowd like a glowing beacon against the darkness of paper and math. Especially in seller’s markets, where there is lots of competition with other buyers, an offer letter can give you an edge.
Consider what the home means to the seller. It could be the house where they raised their children, full of countless birthday parties and the family dog running around the backyard. It can mean a lot to them knowing that they’re selling it to someone who will take care of it and (hopefully) love it the same way they do.
New York real estate agent Stephanie Morgan, who has more than 18 years of experience, says that, “Real estate is a highly emotional transaction,” and that whenever she got the sense that a home held sentimental value, she would work with her clients on crafting a letter.
Offer letters aren’t appropriate in every circumstance, however. If a house is being sold as part of a divorce or under some other traumatic or contentious circumstance, then it might be best to avoid stirring up potentially conflicted emotions. Such letters may also make little difference if the house being sold was an investment property or if other offers are significantly higher than yours.
Considerations in a modern world
In recent years, the possibility that offer letters may lead to violations of Fair Housing laws has made them all but banned in certain areas. You may find that your agent is reluctant to send such a letter along, or even that the seller refuses any offers that come with a letter.
This is because it is illegal to discriminate on the basis of any protected class when selling a home, including race, color, religion, sex or gender, disability, national origin, or familial status. So, for example, if the seller learns your race or family status through your offer letter, even through something as innocuous as your signature, and then uses that in the decision-making process, this can put them in legal jeopardy. In fact, even if they didn’t use that information to make their decision, it can still be a problem if anyone perceives or thinks that they did.
Complaints related to perceived violations resulting from offer letters are rare, but as Stephanie Morgan says, she has seen, “a surge in the private remarks of Realtors,” that they will not accept any offers with these “love letters” attached. In her own practice, she no longer sends letters as a matter of course, but instead only offers a sentence or two if there is a simple connection that can be made.
The building blocks to a winning letter
Use actual paper and a pen. This is a letter, not an email — nice stationery might even win you some points. Anything that can add a personal touch will increase the possibility of emotional pull.
Be sure to greet the seller by name. Starting a letter with “Dear seller” simply does not give off a personable vibe. You should be able to get the name from your agent if you don’t have it already.
Introduce yourself in the letter, but be careful not to give away too many details. You want them to have a sense of who you are, but not so much information that they can start finding reasons to dislike you. Less is more — most especially when it comes to any information that may hint at your status within any protected class, as mentioned above.
Find common ground and determine a way to make a personal connection. This can be tricky because many homes are staged to remove personal belongings. Stephanie Morgan mentions that she instructs her clients to stage their homes for exactly that reason. She says, “I don’t want people to be able to read my clients and understand where they’re coming from. It’s a bit of a poker game.”
But if you notice a beautiful garden outside, or an impeccable kitchen, you can mention the fact that you are an avid gardener or an accomplished cook. Is there a dog house in the backyard? Tell them about your plans for a new puppy.
Include details about why you love the house. For someone who has lived in the house a long time, those details are things they love, too! And besides, everyone likes to be complimented. You can really make your offer letter shine by giving them details about what you love and why you want this house to be yours.
Your offer letter might also benefit if you include (a few) financial details, especially if you aren’t offering full asking price. You can explain (respectfully) why and also mention your mortgage preapproval.
It’s also good to point out where you can be flexible. If you can let the seller pick the closing date or otherwise have the ability to offer concessions here and there, tell the seller about that. Not only does it inform them of your flexibility, but it lets them know you are personable and approachable about it.
Finally, don’t forget to say thank you. Even if the seller doesn’t accept your offer, they took the time to read it, and you should show your appreciation for that.
And speaking of taking the time to read it, be sure to keep it short. Nobody wants to read an essay — a few paragraphs to one page is sufficient.
What to leave out of the offer letter
Now that you know what to include in the letter, it’s important to examine what not to include and why.
Don’t get too personal. Any information that identifies your status within a protected class is becoming more and more of a no-no. So be sure to leave that out and instead focus on commonalities and details about the house itself.
Don’t tell the seller what you want to change. Focus on the positives only, not what you don’t love. Sometimes too much information is bad.
Morgan adds that people “don’t want to hear what you’re going to do differently because it’s almost like a judgment that they were doing something wrong with their home.”
Don’t whine. An offer letter is not a place to complain, but a place to appeal. If you think the price is unfair, or you’re not happy about the seller’s timing needs, this is not a good opportunity to voice those thoughts.
Don’t go overboard with financial details. There is such a thing as giving away too much. You don’t want to leave them either afraid you won’t be able to secure a loan, or to hint that you’re well enough off that you won’t want to negotiate the price.
Don’t contradict the purchase agreement. Try to leave the details vague in the offer letter (it’s more about emotion) and let the purchase agreement handle the specifics; if you do cite the price or another detail, make sure it corresponds with the legal document.
Don’t include a photo. You may see suggestions that you include a picture, but doing so can backfire. It’s usually safest to leave it out. This is another manifestation of the Fair Housing issue; the seller is open to a potential lawsuit if they consider an offer from a household or buyer with a photo attached and that buyer is part of a protected class.
Ready, set, write!
Let’s wrap it up! Remember: the offer letter is an appeal to emotion. It should be short, sweet, and personable without revealing information that sets anyone up for Fair Housing violation issues. In other words, focus on the property and universal topics. Highlight what you love about the place, mention common hobbies or pets, and leave out anything negative!
If you’re not sure what to put in your offer letter (or whether to write one at all), talk to your real estate agent and ask their advice.
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