Back in the good old days of real estate (not so long ago…in the first half of this decade, in Northern Virginia and other areas), buyers were having a hard time purchasing the homes they wanted, or any home. Many buyers were beat out by other buyers again and again, even if their offer was submitted for full price or more on the first day the home was on the market.
After dealing with rejection over and over, some buyers came up with the idea of including a love letter with their offer. This is a letter that attempts to gain emotional support from the seller for this buyer. It paints a picture of how much the buyer likes the property and how they plan to enjoy it for years to come. Buyers often tell a story about their family, their children, their pets and why this is the perfect home for them. This strategy can also be used when offering a lower price or asking for furnishings.
The time is over when buyers made a list of insults to try to beat down sellers prices. That never really worked anyway, in my opinion. It is a better strategy to compliment the seller on their good taste and give them a picture of how the next owner will enjoy the fruits of the sellers labors and efforts.
Needless to say, I believe the love letter is a great relationship-building tool that buyers can use to help make their case to sellers. Even if there is not a competitive situation, it can help buyers make a connection with sellers that cannot come through a written offer alone.
One of my buyer couples simply did not quite have the financial ability to purchase the property of their dreams. Rather than give up on this lot, we worked with them to undertake this process. First, we did all of our due diligence upfront. We contacted a few builders to review the lot. We checked on all of the issues related to the dock and shoreline. We reviewed the lot with a surveyor and examined the septic permit on file with the county.
Second, we wrote up an offer. This offer was far below asking price, but was for cash and had no contingencies at all. The offer was right at the buyers absolute financial limit. It included a large, non-refundable (if accepted) deposit check. Because we had done all of our due diligence upfront and had no contingencies, we had contacted a closing attorney and made a plan to close in 72 hours if the offer was accepted.
Third, the purchasers wrote a beautiful love letter. They told of their years of public service and their desire to retire at Smith Mountain Lake, the loveliest place they had ever seen. They told what type of home they planned to build and how their grandchildren would come to enjoy the lake.
Lastly, we contacted the sellers agent. She was surprised that we had already conducted the due diligence upfront, and even more surprised that we offered to close later that week. She shared, however, that the seller had previously declined offers higher than the one we were making.
The seller was a person of principle, and he cared about other factors in addition to the money. He therefore accepted the offer. He had never received an offer like this, and I think one of the deciding factors was the love letter. The seller felt a connection with the buyers and even asked if he could meet them. Even though the seller took far less than he desired, he felt great about the buyers and the transaction, and the buyers were able to acquire the property of their dreams.
Note that I am not recommending a manipulative strategy in which a buyer attempts to persuade a seller to do something that is not in his best interest. Rather I am suggesting a way for buyers to warm up the traditionally cold process of the written offer. The love letter takes what can sometimes be a frustrating and even insulting process and uses it to potentially form a bond between the parties. After all, the goal of a successful real estate transaction is a win-win. And maybe a few friendships can be developed along the way, which is a big plus in any transaction.