In a competitive housing market, where it may seem as though the highest offer always wins, it is reassuring to know this isn't always the case.
Last month, a woman moving to Arizona decided to sell her home in the Bay Area, one of the nation's most competitive housing markets. She listed her home for $349,000, and after one week she had 13 offers. One offer included a letter in which the buyers – a young family — introduced themselves and explained how much they loved and wanted the home. Their offer price was more than $10,000 under the top offer, and yet the woman selling the house ignored the higher offer and sold to the young family.
This is just one recent example of what I tell homebuyers all the time. Sometimes, a sincere letter from a buyer to the seller can close a financial gap in your offer.
About a year ago, my wife and I found a second home we wanted to buy in Denver close to where our three daughters live. The house that caught our eye was down the street from a house where my wife and I had lived previously. So I took the time to write a letter to the seller explaining how much we loved our former neighborhood and hoped to return. The seller took our offer, and I have no doubt our letter bolstered it.
Stories of letters influencing sellers are more common than you might think. Yes, many sellers want or need the highest offer, and a heart-felt letter won't change that.
The truth is we are all emotional about real estate. The dollars and cents of a purchase or sale matter, but our emotional connections to our homes and future homes can have an intangible influence. Many sellers want to feel their home will be valued and loved in the future just as they have loved and cared for it – especially if it's where a family was raised or a home that has been in the family for generations.
With home prices rising and inventory tight in many markets, 2016 will likely be another competitive year for homebuyers. You want to put forward your strongest offer – that means making it strong financially and taking the extra step to provide a letter to the seller.
1) Explain why you want the home. Tell the seller what you like or love about the house, neighborhood, or city. Be sincere in describing what caught your eye about the home or community.
2) Talk about yourself. Buying and selling a home is a formal and seemingly impersonal process. With all the disclosures and documents, negotiations over contingencies, and offers and counter-offers, we may lose sight of the fact there is a real person selling the home and a real person excited to move in. Your buyer's letter is an opportunity to help personalize the transaction and connect emotionally with the seller.
3) Enlist the help of your agent. A good agent can help you in this process. Your agent can help find out why the owner is selling, how long they've owned the property, and other details that may be important to know in writing a letter.
If you're buying or selling a home, I'd love to hear about your experience with letters. Do letters matter to you?