In hot markets throughout the country, where home buyers are running into multiple bid situations, buyers often write home offer letters in an attempt to persuade the sellers to give them the edge - even over buyers offering more money. Frankly, it doesn't even have to be a multiple bid situation since you could use such a letter to warm up a home seller as you begin the negotiation process.
We've run into situations in the past where it seemed appropriate to write a home offer letter but recently we're running into this more frequently in certain hot neighborhoods with some types of housing. Apparently this gimmick has some success and there is no shortage of advice on how to go about writing an effective letter so I won't spend time on that aspect. Here are a couple of sources that look pretty good: 1) How To Write An Offer Letter That Will Win The House and 2) Home Buyer's Offer Letter To Seller (note that this one is geared towards military personnel but the general advice is still spot on).
However, because I believe that I'm a highly rational person I prefer to focus on the psychology of this tactic, first looking at the home seller's perspective.
Should A Home Seller Care About An Offer Letter?
As I just said I'm highly rational. For me it's all about the Benjamins. What offer is going to get you the highest expected sale price, factoring in the likelihood that the home buyer is actually going to keep all their promises? Personally, I would just ignore any letters that came in. So my advice to our seller clients would simply be to ignore those letters also. The only exceptions would be if your
father mother was born in the house or maybe if Abraham Lincoln slept there and all but one set of buyers wants to tear down the house. Even then how much money are you willing to leave on the table so that you can walk away with a warm, fuzzy feeling?
Do Home Sellers Care About An Offer Letter?
Nevertheless, there are some sellers that do care about such matters. I think California is full of people like this. Several years ago when I was helping one of my daughters find a place to rent there I ran into a number of landlords who seemed to care way too much about who they were renting to. I'm not talking about the rational concerns regarding income, reliability, and propensity to destroy a home but rather personality. These landlords would intentionally price their rentals below market in order to draw a huge pool of potential tenants and then they would pick the ones they liked - personally. Drove me nuts.
In the course of our business we've encountered sellers that wanted to keep two adjacent properties together because that's what their parents would have wanted even though selling them separately could have gotten them more money. And we've heard of sellers handing the advantage to pregnant couples that submit photos of their puppy. Seriously. Go figure.
So if you get wind that the home sellers you are dealing with might be real softies then by all means swallow your pride and take a few more minutes and draft a really sappy letter.
#RealEstate #HomeBuying #HomeSelling
Gary Lucido is the President of Lucid Realty, the Chicago area's full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think he's the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.