Writing a Home-Offer Letter – Is It a Good Idea?

When buying a home in Phoenix AZ area, the most important letter you’ll submit to a home seller is the one you’ll get from your lender stating that you are preapproved for a mortgage. Savvy listing agents will counsel their clients to refuse offers from unapproved buyers, so all the flowery prose of a home-offer letter will mean nothing without loan preapproval.

Assuming you have your lender’s letter, whether or not you also submit a home-offer letter depends a great deal on the type of market in which you’re buying and the competition.

The Market

When the real estate market has lots of buyers looking for homes and few houses for sale, it’s a seller’s market. With the seller in the driver’s seat, purchase offers tend to get cleaner, with fewer demands from buyers. Offering prices typically come in at or even over the asking price. When supply is low and demand is high, it’s challenging for buyers.

The Competition

If you’re unfortunate enough to have fallen in love with the same home that three other people are smitten with, be prepared to do battle. The chances are good that they, too, are preapproved for a mortgage, which puts you on equal footing. If any of them is waving cash, however, all bets are off, as the table is tilted in the cash-buyer’s favor.

There are several reasons for this, the most significant of which is that the seller doesn’t have to worry about a loan falling through if the house becomes overpriced in a bidding war. There is no appraisal with a cash offer. There is no lag time, waiting for final loan approval. Cash buyers are streamlined buyers, and they usually prevail in a bidding war.

Home-offer letters, however, have been known to sway some homeowners in this situation – especially those with an emotional attachment to the home.

The “Pick Me” Letter

The home-offer letter was created years ago to help sellers stand out from the competition. The problem now is that so many buyers use them, they may be losing their effectiveness.

Since there is no harm in trying, however, let’s take a look at some tips for the ideal home-offer letter:

• Don’t be robotic. This isn’t a form letter, it’s a letter that you hope will tip the scales in your favor, so put as much personality into it as possible. Start by using the seller’s name in the salutation. “Dear John and Mary” is far better than “Dear Seller.”
• Make it emotional. Tell the seller how the home resonates with you. Even if it’s just the color of the walls, tell the seller how much you appreciate her taste and how close it matches yours. Be sincere in telling the seller why you fell in love with the home and why you want to live in it.
• Explain why they should pick you. Point out your strong points as a buyer, such as few contingencies, your willingness to increase the offered price, or your strong credit score that will help your loan approval zip right through.
  Keep it brief. Try not to go over three to four paragraphs.
  Keep it upbeat and positive. Sellers don’t care if theirs is the ninth house you’ve made an offer on. They don’t care that you need a one-story because of health issues. Accentuate the positive and leave the complaints out of it.

Don’t forget to include photographs to help cement the fact that you are far more than a signature on a purchase agreement.

There’s an old saying that is frequently tossed around in business circles: “People do business with people they know, like and trust.” Helping the seller get to know you, like you and trust you is a tall order for a short letter, but it should be your goal nonetheless.

Wondering how much house you can afford?
Click here to access the Mortgage House Payment Calculator. Simply add in the price of the home you are considering and the calculator will return your estimated house payment. Change length of loan and interest rates to adjust results.

Phoenix AZ Housing Market Trends Report

View Phoenix AZ Housing Market Report. The data used this Phoenix AZ Market Report is consolidated from multiple sources and includes current listings, recent sales, and more. Whether you are a buyer or seller, the knowledge you gain will help put you in control of your real estate transactions.

Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.

If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.

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