How Your Offer Letter Can Help You Get The Home You Want, Even If You Aren’t The Highest Bidder
We all know that finding the dream home is not easy. Finding a choice property to investment can also be pretty challenging. Sometimes the process could take months. You find yourself visiting up to 20, 30, 40 properties with not one that is appealing to you. The journey can be defeating. But what happens when you finally lay eyes on that one real estate property you just cannot let go of? The problem is, lots of other people probably feel the exact same way you do. After all, good properties are not easy to come by. It’s all comes down to timing and luck a lot of the time. The thing with good products is that they are highly sought after, and for good reason. People want them because they offer a value that other lesser products do not have. Have you ever tried to get your hands on a new big product launch? Take the iPhone for example, people will fight tooth and nail to get their hands on one as soon as these hot commodities come out on the market. Why? Because they offer a certain degree of luxury lifestyle, and everyone wants to get a piece of it. Hot commodities often equate to fierce competition and the real estate market is no stranger to that. A home that is hot on the market will be sought after by other interested buyers. In such a competitive type of environment, how can you make yourself stand out?
Here comes the secret weapon: An Offer Letter.
Yes, you heard us right. We are looking beyond just money now, because sometimes money can only get you so far when the competing offers are too close to your own. What if the asking price is beyond your reach? Most people will be deterred by an asking price that is beyond what they are capable of affording, but there are always the outliers. These are the exceptions to the rule. You won’t know if you can win a bid unless you try right? In these extreme cases, your best bet is to try writing a killer offer letter that can knock the seller’s socks off. This is your one chance to leave an impressionable memory with the seller and persuade him/her to sell the home to you over all the other offers. Sometimes, writing an authentic personal letter to the seller could sway their decision. This often works better with a personal home purchase over an investor who is just making the rounds to purchase up property for a real estate portfolio.
Typically, in the real estate market, the way to get noticed is to make the highest offer in an attempt to win a bid on a property. Whoever throws out the highest price wins. That’s generally the rule, not the exception. Sometimes this works, sometimes it doesn’t. What happens when a seller is faced with two very similar offers? The numbers start to look the same after a while, and a skillfully written offer can sometimes tip the scales toward your side of the bid.
A home is a very personal investment — for both buyers and sellers. After all, there’s sentimental value attached to a person’s home. You have invested time in to personalizing it, taking care of it, and building memories there, nurturing relationships with their neighbors and neighborhood, so naturally there’s bound to be some degree of attachment to the place. When you put it up on the market for sale, you aren’t just selling a real estate property. You are selling a piece of your life, your memories, your feelings, and those emotions can often times outweigh the monetary profits. If you have ever watched real estate reality shows, you know how often emotions come in to play during these critical decision making times. Financial gain doesn’t always trump emotions, which is why you can actually sway a seller’s decision when you write a genuine letter that (hopefully) speaks to the seller’s heart. There is power in the perfect real estate offer letter, but only if and when it is done ethically. We are not advocating that you fictionalize your life to create some sob story to tug at the seller’s heartstrings. You should only do it if it’s honest, authentic, personable and concise. If you can emotionally connect with the seller in some way, it can make a huge difference in the way they view your offer. Your offer letter might make a personal connection, or it might not. It’s all very circumstantial, but an offer letter is with the right bid is better than no offer letter at all. It’s important to keep in mind that an offer letter alone is not a done deal to helping you win the home, because it needs to be complemented with the right competitive package for it to be a full-packaged and reasonable offer.
At the end of the day, most sellers want top dollar and a quick sale on their home, so you need to offer them a good deal regardless. You cannot offer them something ridiculously low compared to their asking price and hope that an offer letter will land you the home. That’s just not realistic. Appealing the seller’s emotional side during a transaction only works if you also approach them with the reasonable numbers. What a good offer letter does is reassure the seller that you will treasure their home, and maybe that will be the small detail that gives you an edge over the other competing buyers who are only attracting with the dollar signs. Especially when there are multiple offers on the table, you want to use an offer letter to make yourself stand out from the crowd. It helps to humanize the process, rather than just dealing with cold, hard cash.
How do you write a winning offer letter to a seller — one that will put you securely on the winning side? We have put together some templates of how you can write a good offer letter in the examples given below:
Tell the seller who you are and Craft your offer letter around what you learned at the home viewing
Building your offer around what you learned at the property showing shows that you genuinely cared enough to notice the big and small details about the home. As offer letters become more and more common, you might not be the only bid that is partnered with a letter, therefore it’s crucial that you make yours stand out all the more. Think of it like a resume or CV when applying for a competitive job. You want to craft your letter in such a way that it doesn’t just blend in with the masses. A good way to do is by telling the sellers what you love about the home. By detailing the things you noticed in the home, it shows that you paid attention and this isn’t just another regular bid to you. Don’t just tell you sellers you want their home. Go one step further and tell them why you want it. Is it the beautifully designed outdoor patio, the state-of-the-art kitchen, the stunning closet-spaces, the cozy living room or something else that made you say, “I must live here!”? Whatever it is, you want to make sure the sellers know. They will be appreciative that you noticed the effort they put in to designing their home and be flattered to hear what you liked most about it.
My fiancé and I have been searching for months for the perfect home where we can start our new life as a married couple. After seeing a number of properties that have not resonated with us, you can imagine our pleasant surprise when we finally came upon your beautiful home. We were delighted (to say the least). It felt like home when we walked in to your house. The feeling of warmth when we walked in was so lovely, we could really envision ourselves living there as we build our new family. I could picture our Siberian Husky napping in the cozy living room, my fiancé cooking up a feast in your stunning kitchen, and myself working in the home office that you have crafted so nicely. It truly was a pleasure to finally stumble upon our dream home. It is apparent that you put a lot of love and attention in to making the place a real home. It is in such great shape.
My fiancé and I have been dating for five years, and are getting married in three months. I am an entrepreneur with a number of successful businesses and my fiancé is a creative director at a marketing firm. We work very hard but we both homebodies. Home is where we crave to be. My fiancé absolutely loves to cook and she fell head over heels in love with your kitchen. She said it was the best kitchen she had ever seen! I’m spend a large chunk of my time working from home as an entrepreneur and I cannot tell you what a dream your home office is. I would love to have a space like that to work in everyday. As I’ve mentioned already, we have a very dog, a Siberian Husky by the name of Zara. We are looking to get another dog and possibly a cat as well. We noticed during the initial visit that you also have a number of pets yourself. It looks like a dream home for both animals and humans! Your home has just the right amount of space to ensure that we can provide a safe and loving home for children and pets, which we love. The neighborhood is wonderful too. We took a long stroll around, and we just adore the area. We have visited homes at a dozen of neighborhoods in the city but we really felt like we belonged here when we visited even for the first time.
Why it works: By using the information you discover at the home viewing, you can then customize a personal offer letter that directly and specifically addresses the home’s uniqueness to you. It shows that you care for and respect their memories. Talk about why you love the kitchen — is it because you like to cook? Talk about why you love the home office — is it because you work from home? The offer letter uses enthusiastic, positive, and personal language that makes the seller feel warm and comfortable. The buyers also reassure the sellers by explaining who they are, and what their specific plans were for moving in to the home. The buyer letter also connects with the seller on an emotional level by talking about their mutual love for animals.
Explain why your offer is what it is
An offer letter should be written from a place of honesty, as it really is the best policy. Don’t just fake it and tell the seller what you think they want to hear — people can usually see through the lies. It’s important to be transparent, but expressive. Sentiment can produce positive results, and a heartfelt letter that comes from a place of genuineness is the best route to go. Sellers are people too and you want to humanize the process so that they don’t just see you as a piece of paper.
We currently live in an apartment in the heart of the city, but we have known for a long time that when we got married, we would want to relocate to a more spacious home fit for a family in a less congested neighborhood. We have been searching endlessly for a place that could accommodate our love for animals and our plans to have children soon. Hence why we started searching for homes in your neighborhood. We have to say, we visited a number of other homes in and around this neighborhood and none of them came close to yours. We have to be transparent with you as we understand that your asking price is (X amount). We completely understand why your home is listed at that price as it really is the most beautiful home we have come across. Although your home is listed on the market as just slightly out of our price range, it stood out so much to us that we could not just let it go without saying something. Due to our budget constraints as a young couple just starting out, we have had a lot of expenses to pay for — with the wedding, preparation for our first child…and so on. We have been house-hunting for the past year, and this is the first and only home we have actually been interested in. We do realize that you are asking for (X amount) but respectfully hope that you would consider our offer of (X-offer amount). We hope that you don’t look at our offer as disrespectful as this is truly the max amount that we can afford at this time.
We hope that you will consider our offer at this time, and if not, in the event that something changes in the future, we hope that you will keep us in mind as a potential owner of your lovely home. Thank you very much for your consideration, and if you have any questions, please feel free to contact us at...
Why it works:
This template works because the prospective buyers are honest and upfront about their financial situation. They are transparent about how much they are willing to offer. They continue to explain that they know and understand why the home's listed market price is what it is by complimenting the seller on what a beautiful home it is. The prospective buyers respectfully explain the reason for why their offer is lower than the asking price listed. They also explain again how much landing that home would mean to them. The prospective buyer writes in a way that connects with the seller on a deeper emotional level, and makes the request in a respectful manner. By being transparent about their situation, the buyers give some personal details about themselves to paint them as more than just numbers on a piece of paper. They humanize the process.
Make a connection with the seller
Relating to the seller is one of the most important things you can do in an offer letter. In the examples given above, you see how the prospective buyers don’t just jump right in and say they want the house. They tell the seller who they are and give the seller a glimpse in to their life. They make connections with the seller to demonstrate what they have in common and why the house would be perfect for them.
There are no words to describe the way we felt when we first walked in to your home. You know how they say you know when you know? Well, we knew! We have seen hundreds of homes by now, but none like yours. From the moment we pulled in to the neighborhood, to reaching your home, we appreciated the beautiful details that you have put in to building this place. We can imagine spending our days and nights here, enjoying the ocean views, and away from the busy lifestyle of the city life that we have come to be all too familiar with. I gather that much like us, you prefer to live in a place of serenity, a place that is far removed from the going ons of the city.
We noticed the immaculate details you put in to your home. It was so impressive to see that someone in this day and age still cares for such details in aesthetics and design. The stunning door frames, the door handles, the railings on the staircases…everything in your home has so much character and history. I have never seen a home where every corner, every niche is lavished with so much attention. We love the Sino-Portuguese influence of the designs. My fiancé could not stop talking about your patio and the majestic Roman-style arched columns surrounding the swimming pool, the turquoise mosaic tiles, and the hanging foliage. We both have a great love for art, design, and culture. We actually met in Italy when we both studied art history and design there, so pardon us for the excitement over the design of your spectacular home. We are so in love.
As we continued our tour through the rest of your home, we couldn’t help but notice that you have a high-ceiling room made in to a grand library. Ever since we have talked about getting married, we knew we wanted a grand library in our home. We are both avid readers and have a great love for books.
Every part of your home spoke out to us and that is why we humbly come to you to present you with our offer. Please know that if you accept our offer, we will surely keep the home just as it is and continue with the legacy and love that you have put into it. We wouldn’t want to change anything. It is what we envisioned our dream home would be like.
Why it works:
This offer letter works because the prospective buyers uses specific examples in the home to call out similarities in their own likes and the seller’s clear passion for art and design. Common interests can make all the difference with home sellers, but remember not to lie! Often with homeowners, the emotional attachment is so strong that they only want to pass their home on to someone who would appreciate it just as much. They would be afraid to tell the home to someone who would just tear it down and destroy everything they built. The prospective buyer speaks from the heart by keeping it sincere and relatable. You don’t want to come off as a phony and that you are just making things up. If you really cannot relate to the seller in any way, it’s better that you don’t say anything. But if there are things that you find you can make a connection with, then do so in a genuine way. Do not over exaggerate. Do not use all caps and an overboard of exclamation marks — it will come off as too much and possibly backfire as a turnoff.
A final note...
How you craft your offer letter could win or lose you the home. A good offer letter is a very vital component of the negotiation process. Your best chance to win over sellers is when your letter stands out in a positive way, by being respectful, honest, personable, and concise. Avoid going off on a tangent and being overly emotional in your letter, which can evoke a negative response from the seller. Sellers are probably dealing with more than just one applicant at the same time, so you don’t want to be long-winded and waste the seller’s time. Think of your offer letter as your one chance to make a personal connection with the seller. Do not just copy templates of what other people do because every case is different. Add your own personal touch and make it unique. If you are up against better bid offers, an excellently written offer letter could put the odds in your favor.
Have you ever written or received a great offer letter? We would love to hear your experience, story and tips. Have you fallen in love with a home and want to secure a win? Let our team at Engel & Volkers assist you to land that dream home of yours.