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\n <\/div>\n \n Find a Buyer's Agent To Navigate the Homebuying Process<\/h3>\n
Working with a trusted real estate agent can help you ensure you are submitting your best offer, without risking fair housing law violations. HomeLight can match you with a top-performing agent in your area in just under two minutes to get you on your way to homeownership.<\/p>\n \n
Jenah Mahan<\/a> is an experienced agent in Tacoma, Washington who works with 68% more single-family homes than other agents in her area. She says \u201cwhen there were multiple offers on a property about 30% of our buyers would send us offer letters,\u201d and that if she\u2019s representing the buyer, she often urges them to write one.<\/p>\n But Gary Lanham<\/a>, an experienced agent in Fort Lauderdale, Florida, who sells homes 46% quicker than the average agent in his area, has a less favorable viewpoint. \u201cThey should never be common,\u201d he says. \u201cYou\u2019re running the risk of influencing or biasing the seller based on something that could get you and your agent in trouble because of the Civil Rights Act of 1968<\/a> and other fair housing laws<\/a>.\u201d<\/p>\n Whether or not to send an offer letter isn\u2019t always obvious, and as Lanham points out, there are legal considerations to take into account. While it\u2019s best to have an experienced agent guiding you around potential pitfalls, in this post, we\u2019ll cover the basics of writing a letter to a seller when buying a home.<\/p>\n With a lot at stake \u2014 your future dream home \u2014 writing the actual offer may feel intimidating enough. Why might you also include a house \u201clove letter\u201d? Here are some of reasons some buyers choose to include one:<\/p>\n A letter lends a personal touch to your offer. Explaining why you want the house \u2014 you love the neighborhood, or it\u2019s close to the grandparents \u2014 helps sellers visualize someone else living in their old home. And a well-crafted letter can help your offer stand out.<\/p>\n Mahan explains that in 2021\u2019s hot seller\u2019s market, \u201cfor some sellers looking at over 20 offers that were all very similar financing-wise and similar as far as net dollar amount, sometimes the offer letter would make them stand out one way or another and help them visualize a different person in their home.\u201d<\/p>\n You can also use the letter to explain the reason behind your purchase price offer, but be careful. Lanham has seen some sellers react poorly to letters that pitch a sob story. Some sellers might wonder, \u201cWho is this person writing to me, trying to tug on my emotions? This is just a financial deal to me,\u201d he says. In his view, real estate transactions are supposed to be at arm\u2019s length, and an offer letter can lead to bias.<\/p>\n As we mentioned previously, letters to sellers when making an offer can be risky. The Fair House Act prohibits discrimination in housing activities and protects the following characteristics:<\/p>\n These letters, while adding a more personal touch, can provide information to the seller about a particular buyer that could sway their decision. This is why the state of Oregon banned letters to sellers<\/a> \u2014 however, the law has been temporarily suspended and is being challenged. Other states frown upon them for the risk of violating fair housing laws<\/a>, and the National Association of Realtors frowns on them<\/a> as well. In fact, they suggest that Realtors\u00ae refuse to deliver or accept love letters.<\/p>\n Would people make assumptions about your race or ethnicity based on your last name? There are many subtle ways to risk discrimination, Lanham points out, such as: \u201cI go to this church or synagogue over here,\u201d or \u201cmy husband and I look forward to living in this neighborhood,\u201d both of which could tell a seller your religion, marital status, and possible sexual orientation. While you should avoid these telltale markers in an offer letter to begin with, this goes double if you\u2019re worried about discrimination.<\/p>\n There are some circumstances where it\u2019s inappropriate to include an offer letter, if only to avoid hurting the feelings of the sellers.<\/p>\n Some of these inappropriate situations include:<\/p>\n They may already be feeling emotional about selling a childhood home<\/a>, or there could be disputes about the sale proceeds. It\u2019s best to stay away from a potentially sticky situation.<\/p>\n These sellers have no connection to the house. To them, the transaction is purely financial, and writing an offer letter is a waste of time.<\/p>\n Again, emotions may be high. It\u2019s unwise to tell someone who is losing their home under difficult circumstances how much you\u2019re looking forward to living in it. Someone facing a foreclosure<\/a> or who has negotiated a short sale<\/a> with their lender could have a very negative reaction.<\/p>\n If you\u2019ve decided to go for it \u2014 under the guidance of your experienced agent<\/a>, of course, here are some tips to craft the perfect letter.<\/p>\n There\u2019s a big difference between a typewritten, generic thank-you note for the expensive china you bought someone as a wedding present and a personalized note. The same applies to an offer letter \u2014 write it by hand for maximum impact.<\/p>\n There are many ways to create a connection that stay within the law. Mention that you, too, have a wiener dog and you noticed the great photo of their dog. You can include that you want to move closer to family, or that you\u2019ve always dreamed of living in the neighborhood. Find ways to connect with the sellers on the home and the neighborhood\u2019s great features<\/a> that relate to your desire to buy the house.<\/p>\n Tell the seller what you love about the home and get specific \u2014 focusing on the home also helps you avoid violating fair housing laws. Mahan suggests making the offer letter more about the house versus the people living in the house or the family that\u2019s trying to buy the house.<\/p>\n Consider saying, \u201cI love what you did with the backyard, I can imagine my family cooking s’mores in the firepit,\u201d instead of \u201cmy three kids and husband all love camping and can\u2019t wait to make s\u2019mores in the backyard!\u201d Or, \u201cThe fact that you already have bike storage in the garage is so great,\u201d instead of \u201cMy partner bikes to work, so the existing bike storage is great.\u201d<\/p>\n A little flattery can go a long way.<\/p>\n But you don\u2019t want to overdo it. If you sound desperate \u2014 by gushing too much, begging, or mentioning how many homes you\u2019ve missed out on \u2014 it could impact your ability to negotiate later. If the appraisal comes in low<\/a>, or the home inspection reveals major issues, you might want some wiggle room for negotiations.<\/p>\n Maybe you can\u2019t wait to rip out a wall and open up the kitchen to create a great room. Or, someday, you hope to add an addition. Avoid mentioning any plans to remodel or renovate<\/a> the home in your offer letter.<\/p>\n This could upset the seller \u2014 who may think their house is perfect \u201cas is\u201d \u2014 particularly if you plan on changing something they cherish.<\/p>\n For a while, in hot markets, some buyers were including family photos with their offer letters. This is a dicey way to risk tripping fair housing laws. Just skip it.<\/p>\n If a seller receives multiple offers, and 30% of them include an offer letter, that\u2019s more letters for them to read. Keep it short and snappy \u2014 it\u2019s not War and Peace. Keeping it concise increases the odds that they\u2019ll actually read the letter while also examining the financial details and other clauses in the official offer.<\/p>\n Don\u2019t forget to thank the seller for reading your letter. You can also thank them for considering your offer. Just like mild flattery, politeness can go a long way.<\/p>\n Instead of including an offer letter, Lanham prefers that his buyers write their best offer \u2014 period.<\/p>\n When he\u2019s listing a house, he has candid discussions with the sellers. For many of them, they want a short inspection period, such as three to five days, a quick close, i.e. 30 days, possibly a rent-back option<\/a>, or for the buyer to waive the inspection or appraisal contingencies. This all goes into his confidential broker remarks to other agents \u2014 and he reviews other agents\u2019 notes when his buyers are making an offer so that they can include everything the seller wants (within reason).<\/p>\n As he puts it, \u201cIf an offer is good enough, and the best the buyer can present, why do you need the letter?\u201d<\/p>\n In any market, a cash offer has a lot of power. There is a lot of uncertainty in real estate transactions, and buying with cash takes the financing contingency<\/a> out of the equation. A seller might take your cash offer over a higher, mortgage-dependent offer.<\/p>\n To help buyers compete in a challenging market, HomeLight\u2019s Cash Offer<\/a> provides buyers with opportunities to pay cash even though they need financing. HomeLight commits to a 21-day close for free for buyers who qualify. Cash Offer is not available in all areas.<\/p>\n The best purchase price offer is more than the final number. It could have concessions that meet the seller\u2019s needs (see below). A larger down payment or more earnest money<\/a> could also sway sellers. Mahan says, \u201cHigher earnest money is technically free because it goes toward the down payment.\u201d<\/p>\n Your best purchase price offer is a mix of the final number, earnest money, and perhaps paying some of the seller\u2019s closing costs<\/a>. There is more than one way to win out when competing in the financial arena.<\/p>\n What\u2019s an underwritten preapproval? It\u2019s a preapproval letter<\/a> that indicates your lender has put your potential loan through the underwriting process. This signals to the seller that there\u2019s a much higher likelihood the loan will close.<\/p>\n Even as the market cools, it\u2019s worth it to work with a reputable lender to get an underwritten preapproval instead of just a preapproval letter. It will carry more weight with sellers as there is less risk to them that the loan won\u2019t close and the deal will fall through.<\/p>\n What does the seller need that goes beyond money? Lanham mentioned a rent-back period, or a quick close. Sellers might need to move quickly \u2014 due to relocation, or because they already have another house under contract. Find out what they need and include it in the offer letter.<\/p>\n Mahan likes to call the seller\u2019s agent ahead of time and ask when they\u2019d like to close, if they need a shorter inspection period, or shortened contingency times<\/a>. Then, she works with the buyer to include these in her buyer\u2019s offer. She says that, \u201ca well-written offer by your agent, with everything filled out correctly, all addendums included, and that accommodates the seller\u2019s needs,\u201d can be the ticket to closing the deal.<\/p>\nWhy do some buyers include a letter to the seller when making an offer?<\/h2>\n
Adding a personal touch and standing out<\/h3>\n
Explaining the offer<\/h3>\n
Risks of including a letter to the seller when making an offer<\/h2>\n
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When is an offer letter inappropriate?<\/h2>\n
Family members selling a home of a deceased relative.<\/h3>\n
Investors looking to sell quickly and for the most amount of money.<\/h3>\n
Pre-foreclosure or short sale transactions.<\/h3>\n
Tips for crafting the perfect letter<\/h2>\n
Write it by hand<\/h3>\n
Create a connection and find common ground<\/h3>\n
Stay positive<\/h3>\n
Avoid sounding desperate for the home<\/h3>\n
Avoid mentioning plans to remodel or renovate<\/h3>\n
Skip the photo<\/h3>\n
Keep it brief<\/h3>\n
Mind your manners (say thank you!)<\/h3>\n
Other ways to help your offer stand out<\/h2>\n
Consider a cash offer<\/h3>\n
Work closely with your buyer\u2019s agent to make the best purchase price offer<\/h3>\n
Get an underwritten preapproval<\/h3>\n
Consider the seller\u2019s closing needs<\/h3>\n
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It\u2019s not my job to steer what (buyers) write, it is my job to discuss fair housing laws with them and make sure they are compliant. It\u2019s important to have an experienced agent to let them know if there are any red flags.<\/span><\/q>\n
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