I don't know about you, but I love Bonnie Raitt. She's a rockin' inspiration. From her Nick of Time album, "Love Letter" is about writing a love letter, presumably to a lover. But, in our case, let's discuss writing a love letter to the seller of that home you want. In San Francisco real estate, multiple offers and competition abound. Sometimes, making your offer just a bit personal, can be the difference that makes the difference.
The Home Buyer Letter of Introduction has long been in my bag of tricks. We almost always ask our home buyer clients to personalize their offers by writing a letter of introduction to the seller. This letter serves to have the buyer introduce themselves, detail what they love about the listing and neighborhood, and make a case for their offer to be selected.
Why? Because although residential real estate is surely about money & property, it is also about our homes - where we live - and what is more personal than that? We've seen situations in which our clients' offer was accepted over other, higher-priced offers. The listing agent will tell us that the seller connected emotionally with our buyers. They wanted our clients to be the new owners of their home and went out of their way to make that happen.
The New York Times recently wrote about the home buyer love letter becoming a phenomenon of NYC real estate. (Thanks to client & friend, Jessica, for passing the article along!) I am not surprised by this. They usually pick up our - San Francisco Real Estate Agents' - best practices sooner or later! 😉
Read it here: NYT - Securing an Apartment With Help From a Love Letter. The real estate love letter even had a cameo on a recent The Good Wife episode. (Great show, btw.)
A general rule of thumb is that a letter should be included when the seller has a personal connection to the home. The most obvious example is when the home is owner-occupied or staged but you know the sellers are around and just moved out for the sale.
Don't overlook other times when there is no owner-occupant, but there are certainly emotions involved. For example, the listing could be a trust sale where the adult children are selling their parents' home...and the home in which they grew up. It pays to have your agent do a little respectful digging to figure out the history of the listing and the seller.
If there's no obvious "human element" to the sale, for example if the listing is a REO - Bank Foreclosure - or large new construction condo project, it's probably going to be a waste of energy to submit a personal letter. That said, if it's short & sweet, it shouldn't hurt. Who knows, you may grab the attention of the listing agent who has sway with the attorney, bank representative, or developer.
Here are my tips to writing an effective real estate offer letter.
In the cutthroat world of San Francisco real estate, it's important to stand out if you want to win the home of your dreams. Writing a personal letter to the seller is one way to do so.
-DL
As of October 2020, the National Association of REALTORS® issued new recommendations regarding buyer letters.
Because they reveal personal information about the writers, real estate love letters are a potential liability for discrimination.
Protected classes in California include: race, color, ancestry, national origin, religion, sex, sexual orientation, gender, gender identity, gender expression, marital status, familial status, source of income, disability, medical condition, citizenship, primary language, immigration status, military/veteran status, age, criminal history, and any arbitrary determination.
To avoid implicit bias, it is recommended not to write or accept buyer letters included with an offer.
That said, these letters remain commonplace in San Francisco. It is up to the buyer whether to include a letter in their offer, and it is up to the seller whether to accept such letters with incoming offers — not your agent.
But for buyers, the best way to win a home remains to offer the most compelling price and cleanest terms. We'll work with you to ensure that your offer wins but is not over-the-top.
For sellers, the best way to keep emotions — and legal liability — out of the equation is to consider offers solely on their price and terms.
Still have questions? Reach out to us any time.
If you're ready to buy a home in San Francisco, find helpful articles and fill out our Buyer Worksheet here.
If you're thinking of selling your home in San Francisco, tell us more about your situation by filling out our Seller Worksheet.
