You’ve spent months—perhaps years—searching for the perfect house, and you've finally found it. But you're not alone; there's a very strong chance that other home shoppers are vying for it, too. So how can you stand out? Many experts recommend writing a personal offer letter to the seller.
“If there are multiple offers, we always suggest buyers write a letter of introduction as a way to put a personality behind the number,” says Josh Rubin, a broker at Douglas Elliman in New York City.
After all, selling is an emotional process. But does this strategy work? We explored the pros and cons of writing a letter to find out whether it helps or hurts your chances of having your offer accepted.
Why you should write a personal letter
It can appeal to a seller’s soft side: Some buyers use a letter to tell a personal story in the hope that it will resonate with the seller. Tracey Hampson, a real estate agent with Realty One Group in Valencia, CA, says she currently has a listing with three offers, but the offer she likes best is from a couple explaining how they are having their first child and want to raise him in a safe neighborhood.
"This is the exact same scenario my husband and I were in when we first moved," she says.
Touching stories like this can strike a chord with sellers and make them feel comfortable about passing on their home to you.
It helps clear up any confusion about financing: A personal letter can also answer any questions or concerns that a seller might have about your ability to finance the home. For example, Hampson once had a buyer who was in the Air Force and was planning on using a Veterans Affairs loan.
“VA loans have some stigma attached to them because of the loan fees the veteran borrower is not allowed to pay, so the seller has to pay for them," she says. "Also, VA loans usually take longer to close.”
So Hampson included a letter explaining the myths about VA loans. She says it apparently worked; the sellers accepted the offer.
It helps get a seller to work with you in a buyer's market: A personal letter can also be used to help explain your financial situation.
“Back when it was a buyer’s market, letters were useful in getting the seller to accept a lower price, especially if the buyer had financial hardships,” says Vivian Cobb of Cobb Real Estate in Colorado Springs, CO.
Why writing a personal letter can hurt you
It can undercut your power during negotiations: Believe it or not, letting a seller know how much you want to buy their house could hurt you if you make it to the bargaining table.
“There's a belief that a letter tips the scales to the seller when negotiating the price and the inspection,” says Karen Kostiw of Warburg Realty in New York City. “The seller may interpret the letter as the buyers ‘showing their hand,’ and it could weaken their position to negotiate.”
It could make the seller uncomfortable: Sometimes a personal letter can veer into TMI territory. An anxious buyer may divulge more details than the seller is comfortable knowing and ruin their chances of getting the home.
“Or, the buyer could inadvertently come off as insensitive, or say something in the letter that turns off the seller,” Kostiw says.
It could bias the seller: Perhaps the biggest con of writing a personal letter is that it could lead to discrimination, which is why some agents prefer to steer clear of them.
“Most letters consist of the buyers explaining their lives to add a touch of emotion to their otherwise dry contract, which is why it has worked for so long,” says April Macowicz, broker associate and team lead at the MAC Group RE in San Diego.
But the buyers might reveal personal information that prejudices the sellers against them. "The Fair Housing Act states that buyers and sellers cannot discriminate on the basis of race or color, sex, religion, national origin, disability, or familial status," Macowicz explains. But this doesn't mean that discrimination won't occur. "And buyers who find out can sue for discrimination," she says.
That's why Tory Keith, president of Natick, MA–based real estate firm Board and Park, says some seller’s agents don’t even share a personal letter if it contains certain information like a photo or information about the potential buyers' status in any protected class, "because rejection of such an offer could be interpreted as a Fair Housing Act violation.”