Should You Include a Letter to Seller When Buying a Home?

Disclaimer: This article is meant to be used for educational purposes only and is not intended to be construed as financial or legal advice. If you are considering writing a letter to a seller when buying a home, HomeLight always encourages you to reach out to an advisor regarding your own situation.

You’ve fallen in love… with a house. It has the closet space you’ve always dreamed of, or a huge backyard perfect for a vegetable garden. Whatever it is that’s struck your fancy — you must have it. One way that some buyers choose to help their offer stand out is to submit a personalized “love letter” with the offer.

An offer letter could include details about why you love the seller’s home and why you want to live there. It’s often written to tug on their heartstrings — particularly if they have lived there a while and are emotionally attached.

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Jenah Mahan is an experienced agent in Tacoma, Washington who works with 68% more single-family homes than other agents in her area. She says “when there were multiple offers on a property about 30% of our buyers would send us offer letters,” and that if she’s representing the buyer, she often urges them to write one.

But Gary Lanham, an experienced agent in Fort Lauderdale, Florida, who sells homes 46% quicker than the average agent in his area, has a less favorable viewpoint. “They should never be common,” he says. “You’re running the risk of influencing or biasing the seller based on something that could get you and your agent in trouble because of the Civil Rights Act of 1968 and other fair housing laws.”

Whether or not to send an offer letter isn’t always obvious, and as Lanham points out, there are legal considerations to take into account. While it’s best to have an experienced agent guiding you around potential pitfalls, in this post, we’ll cover the basics of writing a letter to a seller when buying a home.

Why do some buyers include a letter to the seller when making an offer?

With a lot at stake — your future dream home — writing the actual offer may feel intimidating enough. Why might you also include a house “love letter”? Here are some of reasons some buyers choose to include one:

Adding a personal touch and standing out

A letter lends a personal touch to your offer. Explaining why you want the house — you love the neighborhood, or it’s close to the grandparents — helps sellers visualize someone else living in their old home. And a well-crafted letter can help your offer stand out.

Mahan explains that in 2021’s hot seller’s market, “for some sellers looking at over 20 offers that were all very similar financing-wise and similar as far as net dollar amount, sometimes the offer letter would make them stand out one way or another and help them visualize a different person in their home.”

Explaining the offer

You can also use the letter to explain the reason behind your purchase price offer, but be careful. Lanham has seen some sellers react poorly to letters that pitch a sob story. Some sellers might wonder, “Who is this person writing to me, trying to tug on my emotions? This is just a financial deal to me,” he says. In his view, real estate transactions are supposed to be at arm’s length, and an offer letter can lead to bias.

Risks of including a letter to the seller when making an offer

As we mentioned previously, letters to sellers when making an offer can be risky. The Fair House Act prohibits discrimination in housing activities and protects the following characteristics:

• Race
• Color
• National origin
• Religion
• Sex (including gender identity and and sexual orientation)
• Familial status
• Disability

These letters, while adding a more personal touch, can provide information to the seller about a particular buyer that could sway their decision. This is why the state of Oregon banned letters to sellers — however, the law has been temporarily suspended and is being challenged. Other states frown upon them for the risk of violating fair housing laws, and the National Association of Realtors frowns on them as well. In fact, they suggest that Realtors® refuse to deliver or accept love letters.

Would people make assumptions about your race or ethnicity based on your last name? There are many subtle ways to risk discrimination, Lanham points out, such as: “I go to this church or synagogue over here,” or “my husband and I look forward to living in this neighborhood,” both of which could tell a seller your religion, marital status, and possible sexual orientation. While you should avoid these telltale markers in an offer letter to begin with, this goes double if you’re worried about discrimination.

When is an offer letter inappropriate?

There are some circumstances where it’s inappropriate to include an offer letter, if only to avoid hurting the feelings of the sellers.

Some of these inappropriate situations include:

Family members selling a home of a deceased relative.

They may already be feeling emotional about selling a childhood home, or there could be disputes about the sale proceeds. It’s best to stay away from a potentially sticky situation.

Investors looking to sell quickly and for the most amount of money.

These sellers have no connection to the house. To them, the transaction is purely financial, and writing an offer letter is a waste of time.

Pre-foreclosure or short sale transactions.

Again, emotions may be high. It’s unwise to tell someone who is losing their home under difficult circumstances how much you’re looking forward to living in it. Someone facing a foreclosure or who has negotiated a short sale with their lender could have a very negative reaction.

Tips for crafting the perfect letter

If you’ve decided to go for it — under the guidance of your experienced agent, of course, here are some tips to craft the perfect letter.

Write it by hand

There’s a big difference between a typewritten, generic thank-you note for the expensive china you bought someone as a wedding present and a personalized note. The same applies to an offer letter — write it by hand for maximum impact.

Create a connection and find common ground

There are many ways to create a connection that stay within the law. Mention that you, too, have a wiener dog and you noticed the great photo of their dog. You can include that you want to move closer to family, or that you’ve always dreamed of living in the neighborhood. Find ways to connect with the sellers on the home and the neighborhood’s great features that relate to your desire to buy the house.

Stay positive

Tell the seller what you love about the home and get specific — focusing on the home also helps you avoid violating fair housing laws. Mahan suggests making the offer letter more about the house versus the people living in the house or the family that’s trying to buy the house.

Consider saying, “I love what you did with the backyard, I can imagine my family cooking s’mores in the firepit,” instead of “my three kids and husband all love camping and can’t wait to make s’mores in the backyard!” Or, “The fact that you already have bike storage in the garage is so great,” instead of “My partner bikes to work, so the existing bike storage is great.”

A little flattery can go a long way.

Avoid sounding desperate for the home

But you don’t want to overdo it. If you sound desperate — by gushing too much, begging, or mentioning how many homes you’ve missed out on — it could impact your ability to negotiate later. If the appraisal comes in low, or the home inspection reveals major issues, you might want some wiggle room for negotiations.

Avoid mentioning plans to remodel or renovate

Maybe you can’t wait to rip out a wall and open up the kitchen to create a great room. Or, someday, you hope to add an addition. Avoid mentioning any plans to remodel or renovate the home in your offer letter.

This could upset the seller — who may think their house is perfect “as is” — particularly if you plan on changing something they cherish.

Skip the photo

For a while, in hot markets, some buyers were including family photos with their offer letters. This is a dicey way to risk tripping fair housing laws. Just skip it.

Keep it brief

If a seller receives multiple offers, and 30% of them include an offer letter, that’s more letters for them to read. Keep it short and snappy — it’s not War and Peace. Keeping it concise increases the odds that they’ll actually read the letter while also examining the financial details and other clauses in the official offer.

Mind your manners (say thank you!)

Don’t forget to thank the seller for reading your letter. You can also thank them for considering your offer. Just like mild flattery, politeness can go a long way.

Other ways to help your offer stand out

Instead of including an offer letter, Lanham prefers that his buyers write their best offer — period.

When he’s listing a house, he has candid discussions with the sellers. For many of them, they want a short inspection period, such as three to five days, a quick close, i.e. 30 days, possibly a rent-back option, or for the buyer to waive the inspection or appraisal contingencies. This all goes into his confidential broker remarks to other agents — and he reviews other agents’ notes when his buyers are making an offer so that they can include everything the seller wants (within reason).

As he puts it, “If an offer is good enough, and the best the buyer can present, why do you need the letter?”

Consider a cash offer

In any market, a cash offer has a lot of power. There is a lot of uncertainty in real estate transactions, and buying with cash takes the financing contingency out of the equation. A seller might take your cash offer over a higher, mortgage-dependent offer.

To help buyers compete in a challenging market, HomeLight’s Cash Offer provides buyers with opportunities to pay cash even though they need financing. HomeLight commits to a 21-day close for free for buyers who qualify. Cash Offer is not available in all areas.

Work closely with your buyer’s agent to make the best purchase price offer

The best purchase price offer is more than the final number. It could have concessions that meet the seller’s needs (see below). A larger down payment or more earnest money could also sway sellers. Mahan says, “Higher earnest money is technically free because it goes toward the down payment.”

Your best purchase price offer is a mix of the final number, earnest money, and perhaps paying some of the seller’s closing costs. There is more than one way to win out when competing in the financial arena.

Get an underwritten preapproval

What’s an underwritten preapproval? It’s a preapproval letter that indicates your lender has put your potential loan through the underwriting process. This signals to the seller that there’s a much higher likelihood the loan will close.

Even as the market cools, it’s worth it to work with a reputable lender to get an underwritten preapproval instead of just a preapproval letter. It will carry more weight with sellers as there is less risk to them that the loan won’t close and the deal will fall through.

Consider the seller’s closing needs

What does the seller need that goes beyond money? Lanham mentioned a rent-back period, or a quick close. Sellers might need to move quickly — due to relocation, or because they already have another house under contract. Find out what they need and include it in the offer letter.

Mahan likes to call the seller’s agent ahead of time and ask when they’d like to close, if they need a shorter inspection period, or shortened contingency times. Then, she works with the buyer to include these in her buyer’s offer. She says that, “a well-written offer by your agent, with everything filled out correctly, all addendums included, and that accommodates the seller’s needs,” can be the ticket to closing the deal.

The final word on offer letters

There are pros and cons to offer letters just like there are pros and cons to stainless steel appliances (sticky fingerprints, anyone?). If you work with a good agent, they can advise you on both the local market and fair housing laws.

While Mahan says, “It’s not my job to steer what (buyers) write, it is my job to discuss fair housing laws with them and make sure they are compliant,” she thinks that “it’s important to have an experienced agent to let them know if there are any red flags.”

With the guidance of a good agent, you can write the best offer and eventually move into the home of your dreams — with or without an offer letter.

Header Image Source: (Aaron Burden / Unsplash)