Estimated reading time: 11 minutes
Want to stand out as a buyer? Learn how to write an impactful buyer’s letter to the home seller. Increase your odds of having your offer accepted.
Writing a buyer’s letter to a home seller along with your offer is a personal way to introduce yourself.
Learn how to write an effective letter and increase your chances of having your offer accepted.
The buyer’s letter phenomenon may not be hot off the press. However, it seems to be back in full force.
Writing a buyer’s letter to a seller is not only a heartfelt gesture, it could also be a foot in the door.
Highest Offers Don’t Always Get Accepted
Believe it or not, not all home sellers want the highest offer, as we learned from my parents and neighbour.
Today, I want to discuss essential tips from a home seller and home buyer‘s perspective.
- It is important to bring your best offer to the table.
- Include a mortgage loan pre-approval letter or state whether you are a cash buyer.
- Put down an ambitious deposit so they know you are serious.
- Offer a quick closing date.
- Drop many or all conditions on the home.
- Writing a personal buyer’s letter to the home seller.
- Interview realtors and find one that is assertive and persistent.
- An example home buyer’s offer template is included.
Make Your Purchase Offer Stand Out
There is significant value for home buyer’s in a seller’s market to be ready when it’s a green light.
Housing prices in Canada have increased exponentially, and it’s been tough negotiations for buyer’s.
Reducing stress when buying a home comes with many variables, and the first is giving it your best shot.
You won’t win some offers, but you might lose your dream house if you back down.
Buyer’s Market vs. Seller’s Market vs. Balanced Market
Is it a buyer’s market or a seller’s market right now?
At the time of writing this blog post, it’s a seller’s market that can all change in an instant.
Homebuyers in Canada have been forced to bid far beyond what they’ve ever imagined for a house.
Millennials feel they will never own a home the way the real estate market is going.
Who can afford a $700,000 starter home?
Not many people or couples unless they have a massive downpayment.
In an attempt to cool the amount of qualified home buyer’s the Federal government has increased the minimum requirements that must be met.
Ottawa raised the level of the “stress test” for mortgages today, setting the new level at 5.25 percent — or two full percentage points above the borrower’s mortgage rate, whichever is higher.
That’s an increase of about half a percentage point from where it was before.
The average price of a Canadian home sold in March went for $716,828, a figure that rose by more than 30 percent in a year. That was the biggest annual increase on record.
CBC News New Stress Test Level 2021
Before purchasing real estate, knowing a few critical details about home buying is essential.
A buyer’s market occurs when there are lots of houses for sale, and a seller’s market is when inventory is limited.
More importantly, a balanced market means there are enough houses for sale as there are buyers and prices are reasonable.
Crazy things happen with both a buyer’s and seller’s markets, so you must be prepared to rumble.
I say that as if buying a house is a sport; however, it’s a draining process, especially when you lose out.
Housing Prices Dictated By Supply Shortage
RE/MAX Canada expected average residential prices to rise 4% to 6% in 2021
An ongoing housing supply shortage is likely to continue, presenting challenges for home buyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX Housing Market Outlook Report estimates a four to six percent increase in the average residential sales price nationwide.
Remax Canada Housing Outlook 2021
Look at this chart provided by Remax Canada to see how the average residential sale prices have increased over the past few years.
2021-housing-outlook-in-CanadaWhat I find interesting is that when we bought our home with a 25% downpayment of $265,000, we thought that was big money.
A Buyer’s Letter Softens The Offer
Looking at the prices of homes for many first-time buyers, owning a home is a dream upon a dream.
In other words, they may never get into a home; if they do, it won’t be for a long while.
For example, I’ve mentioned in a recent post that our neighbours are moving out of Canada.
Soon after they put their home for sale, around 30 viewings were booked for the weekend.
They listed their home for $699,000 and had an offer for nearly $100,000 over asking.
While speaking with our neighbor over the fence, as we often do, he told us he couldn’t believe it.
The second day of viewings was cancelled, and they received an offer as stated above and accepted it.
What made them not want to entertain any further offers?
They had many more on Sunday who wanted to see the house and likely put in an offer.
It’s considered a starter home in a fantastic neighborhood with pride of ownership that shows a 10+.
Do you know what he told us?
Offers were coming in, but one offer, in particular, included a buyer’s letter with a family photo.
We were stunned to hear that home buyer’s were going to great lengths to win a home over the next person.
After both read the buyer’s letter and offer, they stopped the process and sold the home.
Buyer’s Letter Is A Perk You May Want To Consider
What was in that letter we asked that captured you both emotionally?
He told us that they’ve taken such good care of the property, and when they read the buyer’s letter, they knew they had found their match.
Many homeowners who have spent years in a home become emotionally attached.
This was the case since he was in the back garden, sharing a moment with me while I looked at their pink Japanese tree.
You could tell they were sad to go, but better opportunities were awaiting them overseas.
So, although he admitted they could have gotten another 50-60k for the house, they ended it.
Money isn’t always the primary influence for a home seller, especially if they are moving on.
Buyer’s Letter Is The Icing On The Cake
Here’s the best part, or, shall I say coincidental part of writing about a buyer’s letter today.
I hadn’t spoken to my mum and dad for a few months, so I rang them up over the weekend.
We like to keep in touch so we know what’s going especially since my parents are aging.
We were shocked that my parents had sold the family home.
They have owned it for 18 years and decided to sell it so they could move closer to my sister.
The house sold in one day and had multiple viewings and offers, which was great.
Then they tell me about a buyer’s letter they received with two of the offers.
Could you believe it?
Yes, the buyer’s letter is a way into the seller’s heart in the UK.
My parents sold the house to a couple with one child, who included a personal letter about moving back home.
Her parents lived in the city and were aging; she needed to be close to them.
That tugged on my parent’s hearts a bit, but they negotiated over the asking price and won.
The family home was listed for 175,000 pounds and sold for 200,000, which is good for them.
Bring Your Final Offer First
Bringing your best offer to a seller’s market is imperative.
If you don’t, you’ll risk losing the house to someone else who is willing to beat your offer.
Pair that with little to no conditions, and you may be in the running.
Mortgage Pre-Approval Letter
Include a mortgage loan pre-approval letter or state whether you are a cash buyer.
A cash buyer is the same as a buyer with a mortgage. However, cash is the real deal.
When a potential buyer says that they are pre-approved, that still means anything could happen.
If you aren’t paying cash for a house, which most people don’t have the money to do, bring your mortgage pre-approval letter.
Include that with your offer and personal buyer’s letter to the homeowner and see what happens.
Show That You Are A Serious Buyer
Put down an ambitious deposit so they know you are serious and want to buy the house.
When the seller sees that you put in more than a $500 deposit, they will know you are sincere.
When we bought our house, we put $1000 down to let her know we wanted it.
Offer A Quick Closing Date
When we bought our home in May 2009, we rented a room for a quick closing.
This, coupled with the housing market on our side, secured and bought a home immediately.
Today, you have to get creative as the sellers have plenty of buyer’s vying for their homes.
If you can squeeze in a quick closing date, that’s a tick off the positive box.
However, some sellers may have a more extended closing, so if you’re okay with that, you may score, too.
Drop Many Or All Conditions On The House
It may be risky, but you’ll drop many or all the conditions to buy a house.
Don’t be picky and rude if you write a letter because it wastes your time.
Often, it would be best to overlook things that can easily be fixed, such as door handles and flooring.
Overcomplicating your buyer’s letter and telling the owners why it’s not worth as much will be an epic fail.
Perhaps you can do without a home inspection because someone in the family is in the trades.
Maybe one or both of your parents will have a look before you buy to see if there are any apparent issues.
Recently, I know someone who won a bid on a house paying $100,000 over the asking price.
The risk was significant as she stumbled on a pool that needed thousands of dollars in upgrades.
As for the rest of the house, it was just shady renovations, but she wasn’t worried as she was renovating the entire home.
The gift was that she finally got into a home during a seller’s market, where she was continually let down.
Importance Of Writing A Buyer’s Letter To The Seller
Why would anyone want to write a personal buyer’s letter?
Plenty of viewings and offers will be on the table in a seller’s market.
Having an edge over the next guy to rank the highest or near the top would be best.
Writing a heartfelt letter to the sellers is a way to introduce yourself and tell the buyer why you want to buy their house.
As you’ve read above, you can see how property attachment can tug at heartstrings, and it’s not always about the money.
Below, you will see a sample buyer’s letter that you can print and edit to take along with you.
Interview Realtors
I’ve stressed in other blog posts the importance of hiring the right realtor to work for you.
Not all realtors are out to make a quick buck, so hire a real estate agent with high recommendations.
There are many features in a real estate agent that you can look for based on your needs.
I’m not one for hiring friends to do work as a contractor or real estate agent, so consider what could be.
The last thing you want is to be unhappy and argue when you could have done it with someone you don’t know.
I’m not saying to argue, but if you do, at least when the deal is done, they walk away and are not part of your family reunion.
Sample Home Buyer’s Letter To The Seller
You can change the buyer’s letter below to include your personal information.
It is just a sample to give you an idea of what you can include in your letter.
Overall, be honest and sincere and praise what the owner has done to the home.
Share what you liked about the home, and don’t include what you don’t like.
For an extra boost in the running, include a family photo or a photo of who you are.
Sample-personal-buyers-letter-to-buy-a-home-Overall Thoughts About A Buyer’s Letter
A buyer’s letter is a great way to let the sellers know why you want to buy their home.
I also think that if we were to sell our house, if a buyer included a letter, it may be an advantage.
Ultimately, money talks; you might own a new home if you have the highest bid with little to no conditions.
Discussion: What are your thoughts about presenting a home seller with a personal buyer’s letter?
Have you done this, and how did it work out for you?
Please share your thoughts and experiences in the comment section below.
Thanks for reading,
Mr.CBB