In the San Francisco real estate market the competition to buy a home can be fierce. A property receiving multiple offers, sometimes in the double-digits, is not uncommon as supply remains low and demand for homes remains scorching hot. As a result, prices continue to rise and buyers continue to get frustrated, desperate and sometimes just give up. So how can you make sure your offer stands out among the throng of other offers?
As a home buyer, you want to put every effort into every offer you submit. This means doing as much due diligence on the property as possible before writing your offer, pouring over comparable sales close to your subject property to determine the best price to offer, and working with a professional agent who will prepare and present your offer in the best light possible.
But will laboring over a letter to the sellers help? It can. Last year I had two clients get new homes and the tipping point for both were the letters that they wrote to the sellers. Yes, in both cases their offer price was in the same range as other offers, and yes, we submitted a clean, well-packaged offer to the listing agent. But in both instances we avoided a multiple counter offer situation because the seller “liked” my buyers and wanted to work with them. Their well-thought out letter helped them avoid possibly losing the property, and potentially saved them thousands of dollars that they would have had to spend to increase their offer price.
Research seems to be backing this up. A survey found that compared to the years before the recession, sellers were twice as likely to accept an offer based on emotion and not just money alone.
And that’s where the power of a personal, well-written letter to the sellers can make a difference. As a buyer, you know what an emotional process purchasing a home can be. Consider for a moment that the same can be true for the parties for the other side of the table: the sellers. Perhaps they are a retired couple who are selling the home in which they raised their family. Or this was the sellers’ first home purchase where they experienced their first taste of financial independence or started their family. Or they are children who are selling the home they grew up in. In many ways, selling a home can be an emotional endeavor for the seller. It may matter to them who will carry on the history of their home.
Some tips to writing a great letter to the seller of a home:
- Write to your audience: Learn what you can about the sellers. As an agent, I always try to find out about the sellers from the listing agent (keeping very much in mind that agents have a fiduciary duty to protect their clients’ confidentiality). Have your agent check the tax records to see when the home was last sold (1963? There’s a good chance the sellers raised their family there). Again, read the disclosures! Does the seller reveal specifics about the property that makes you believe they lived there vs. rented it out. What clues did you see in the home when you visited?
2. Be specific: Don’t write a generic letter to be used for every offer you submit saying that “you just fell in love with the house and hope to call home”. What specifically do you love about the home? One of my clients last year owns a custom tile company and wrote about the beauty of the original tile in the bathrooms and wrought iron bannisters on the stairs. If the neighborhood is very community-centric, write about how much you will miss your old neighbors but look forward to participating in the annual family picnic or block party at the new home. Do you love to cook and can’t wait to use that gourmet kitchen to entertain friends and family? Tell the sellers that and be as specific as possible.
3. Be personable: Say a little about you and/ or your family, and your journey to find this perfect home. Let the sellers get to know you too. Many buyers will include a photo and there are mixed opinions about this. If you do submit a photo, make sure it’s tasteful but shows a bit of your personality.
1. Be respectful: A little common sense goes a long way here. Does the back yard have 30 year-old fruit trees that have been lovingly surrounded by primordial boxwood bushes shaped into clever caricatures? This would not be the time to tell the sellers how much you look forward to tearing it all out to put in a basketball court or Tikki hut. The same is true for the interior of the home. So the kitchen was last remodeled in 1972 and you’re dying to ditch the avocado-green fridge. Now is not the time to point that out. And the seller is probably very much aware that the fridge needs to go. It’s okay to say that you look forward to improving the home to make it your own, but try to refrain from sharing your plans to gut the place and focus on the positives.
A letter to the seller may not always make a difference. At the end of the day, a good, competitive price along with a clean, organized offer is paramount. But in a market as competitive as the San Francisco real estate market, isn’t it worth doing all you can to put your very best foot forward?
If you are considering buying or selling a home in San Francisco, be sure to give me a call!
Image courtesy of Simon Howden at FreeDigitalPhotos.net