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How To Write A House Offer Letter

Certified Mortgage Advisor
NMLS 1701021
November 27, 2019

What is a home offer letter?

So first of all, a home offer letter is basically a letter that you're going to submit to a seller when you're putting in an offer on a house. So here's the problem that a lot of times we'll run into as a buyer in a heavy seller's market. A seller's market is basically where there are not a lot of houses and you have a lot of buyers competing for the same home.

Problems with sellers market

So what happens to a seller is they're getting a lot of different offers on their house. Maybe they're getting 10 different offers from 10 different buyers, and they're looking through and trying to see which offers are they going to accept.

Why we need to make a home offer letter?

Now to a seller, all they're seeing is a bunch of different terms and numbers, and they have no idea which offers they actually want to go with. So when you, as a buyer put in a home offer letter, you can appeal a little bit to the emotions of the seller and start to spell out a little bit of why you want to move into the seller's home.

The reason why it works

And the reason why this works is number one, it helps your offer stand out amongst all of the other offers that don't have offer letters. And two think about the seller like yourself. Like most of the time, we don't want to just get rid of a house. There are a lot of memories that have been created by the seller. And they want someone to also care for that home when the next owner has it. So an offer letter helps you spell that out a little bit.

Writing an offer letter walkthrough

So let's walk through how to write an offer letter to make sure that has maximum impact on helping your offer stand out amongst the competition.

Make it hand written

Number one, you want this to be hand written and at most one page. Don't make it seem like this is just something you copy and paste it over to a seller because if they take a look at it, they're just going to throw it away. Make sure it's handwritten.

Show some emotions

So it communicates the emotion and the thoughtfulness you have and make sure it's only one page. A seller is not going to spend a bunch of time reading this, so one-page max.

Also, you want to talk about yourself and your family. Don't just talk about the home again. We're wanting to appeal to the sellers' emotions and the idea that they want to have this home be cared for by a family who needs this home, who really wants this home. Who's planning their future in this house. To explain a little bit about who you are, about your family. Maybe include some family photos if you'd like to. So they can put a picture to the family as well.

Explain the benefits for your family

Also, explain the main benefits that you and your family would get from this. Maybe the large kitchen is where you're going to plan on having a family get-together at night or on holidays and invite people over. Let the seller know how you're planning on using the home. Especially from an emotional context and how it's going to benefit you in the future.

Tell how you love the home

Also point out the home's characteristics, especially any projects that the seller worked on. So this is where we're showing how much we really liked the house based on the characteristics of the home. Maybe you've always wanted to live in this neighborhood as a child growing up, and you're so excited this home finally went on the market that something that was in your pricing bracket. And you've always wanted to live in a home that's next to this specific park or this specific river, put in those characteristics, those benefits that you're really liking in this home and how it's going to benefit you and your family or any projects that the seller has worked on.

So if the seller has done a lot of work on their landscaping compliment and lets them know how much you value the work that they put into that house that you also want to live in the future.

You should be willing to close

Also, you're going to want to explain your willingness to close. The sellers might love that you have an emotional appeal here, but they also want to close on a home. You might have a great emotional explanation, but if you don't have the ability to close on time and to close quickly and to have a high chance of success of closing, then the seller is going to go with another offer. So something you could put in briefly in your offer letter is we're super excited to explore moving into this home.

We're already pre-approved and we're able to close within a specific timeframe or let them know that we're ready to close. As soon as you're ready. That way, the seller knows that if they move forward with your offer, there's a high chance of success of its closing and that you're really motivated to move into that house.

Explain your bid

Also, something else is to explain your bid, especially if it's low. So when you're putting in a home offer letter beneath that is going to be the contract offer that you're going to submit as well. That's showing the purchase price that you're wanting to submit for the house. Any credits that you're asking for timelines and everything like that.

So if the home is listed for 200,000 and you come in at 190, go ahead and explain in a very polite way you're pricing. Give some context to the price. Often what happens is when people put an offers it's just black and white, it's just numbers. And so the seller sometimes can see that and then feels a little off, or maybe they feel like you're not respecting them as a seller if you come in low.

But if you explain some content, with your pricing, you might be able to help ease that a little bit. For instance, maybe 190 is the top of your pricing bracket, but you were super excited that this house came on the market and it was very close. And so you wanted to make that appeal and say, Hey, 190 is the top of our bracket, but we wanted to put an offer because this is how much this home is going to benefit our family.

Don't try to explain or add justification to a lower price

Meaning, don't come in and say, we're only offering 190 because there's still this amount of work and this amount of work and this amount of work, you don't want to criticize the home. We're looking for an agreement, not an argument here. So give it some context, but be polite most of all.

Number 1: Avoid talking about things that you want to change

So if it's a close four plan, don't talk about how you want to tear down walls to make it an open floor plan. They don't want to hear about that. That's just seen as negative, only talk about the high points, the things that you are excited about with the home things that you love, and how it's going to benefit you. Focus on that. Don't focus on things that need to be changed or things that you need to move or rearrange for your family.

Number 2: Stay away from anything negative

You want agreement, not conflict. So don't talk about anything negative here, nothing about how it's being presented. Nothing about pictures, nothing about the home itself. Don't give the seller any reason to see negativity there. So make sure you don't have that.

Number 3: Don't include any info that's outside of your offer

So the best way to do this is if you do have your offer letter, send it to your realtor, have them look through it, to make sure there's nothing in there, but we want to make sure we don't give the seller anything that they can negotiate with.

So don't explain anything about pricing or timeline that can be used by a seller to negotiate. For instance, you don't want to say, we have to move within these next month or else we'll be out of it. Then the seller can use that in that kind of sudden negotiation to be able to say if you want to move this badly, then it's going to be for this price. And there's not as much flexibility there.

Overall an offer letter is going to be a great way for you to stand out. Really, isn't going to take that long for you to just handwrite it on a sheet of paper and submit it with your offer.

Email me → kyle@winthehouseyoulove.com
Kyle Andrew Seagraves is Federal Mortgage Loan Originator (NMLS 1701021) licensed in all 50 states with the Dan Frio Team at Allied First Bank (NMLS 203463), an Equal Housing Lender. Separately, Kyle owns Win The House You Love LLC, an education company. Win The House You Love LLC is not a lender, does not issue loan qualifications, and does not extend credit of any kind. This website is only for educational usage. All calculations should be verified independently. This website is not an offer to lend and should not directly be used to make decisions on home offers, purchasing decisions, nor loan selections. Not guaranteed to provide accurate results, imply lending terms, qualification amounts, nor real estate advice. Seek counsel from a licensed real estate agent, loan originator, financial planner, accountant, and/or attorney for real estate, legal, and/or financial advice.

Allied First Bank is not affiliated with the VA, FHA or any other government agency. This site has not been approved by any government agency.
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