In a hot market, you need to do everything you can to get your offer accepted. These include things like waiving contingencies, inspections and appraisals, and the most popular one, paying all cash for a home.
For one of our investment properties, there were 15 offers on the property, not including our own. The reason we had our offer accepted was not because we paid $50,000 above the list price, and neither did we waive the inspection contingency. Rather, we committed to paying the list price despite what the appraisal would come in at (shocker: it came in at $5,000 under our offer). And on top of that, we wrote a nice, friendly, endearing letter to the homeowner.
When it came time to finally meet, the homeowner told us that it was our letter that set us apart from the other offers. No one else had written one, and our letter had built rapport with the homeowner.
It doesn’t always work. But it might. And because it just might, it’s worth the effort.
Here is an example of an offer letter you can write to the seller to increase your chances of having your offer accepted. It is a letter that I used to purchase my first rental property:
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Hi [SELLER NAME]!
My name is Leonard, and I really like your home! I love the community and the location.
Thank you for being so responsive during this process and giving us your time and consideration.
As you are aware, [ADDRESS], has some maintenance concerns. A few things came up during the inspection that made me reconsider my initial offer. I learned that need to acquire a permit for the garage bedroom and potentially demolish and rebuild it, I’ll need to put in new flooring, fix a leaking, aging roof, address several electrical issues, of course, the standard paint/etc., and leave room for any unforeseen issues that may come up during the renovation process.
My inspector and contractor have quoted me close to $XX,XXX of repair costs, and months of work. Looking at similar, renovated homes in the area, I would not break even with a price higher than $XXX,XXX.
I hope this offer sounds reasonable to you, given the condition of the home. I know I’m offering less than you were asking, but due to the repairs needed, these are the numbers that make it work for me.
I look forward to hearing from you,
Sincerely,
Leonard
[INCLUDE A PHOTO OF YOURSELF]
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The letter should first and foremost be cordial and friendly. It needs to build rapport. It needs to show the seller that you are working towards an offer that will benefit both you and the seller. Thank the seller for taking the time to read your letter. Mention that you really like the home (why else would you be putting an offer in?) Mention some positive things about the house: floor plan, kitchen, color schemes, etc.
It should introduce you, even giving the seller a little bit of a background on yourself. Who are you? Are you a first-timer in the area? What is your purpose for buying the home? How is it personal to you? Why this home specifically? Will you be moving from your childhood home and into your forever home? What do you intend to do with the home? These stories, if genuine, will build rapport with the seller. However, keep it short. One or two sentences will do.
At the same time, highlight some issues, if any, the home has. This will be the hook to your offer. Why are you offering what you are offering? If applicable, mention other homes in the area that are similar that have gone for less. Bring up how much it’ll cost you to make repairs. Mention your budget if you can.
Finally, include a photo of you and whoever else will be living in the home with you. This goes a long way, and really personalizes the note, so it is not just text that they are doing business with, but a living, breathing person(s).
Some sellers don’t really care about a letter. Naturally, they want the highest offer they can get on a home. But if there are two offers exactly the same, and one of them comes with a friendly letter and a face and personality, you bet they’ll choose the person over the number, especially if you come off as personable and friendly.
It helped me in purchasing a home. And I use it every time I make an offer now. You never know when it might strike a chord in someone and make them choose your offer over the many other offers in a hot market.
Feel free to use the template above. Personalize it to fit your circumstances. Give it a go. See what it does for you.
