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Why writing a personal offer letter may not be such a great idea

By Mike Wheatley | April 26, 2019

Demand for homes in some parts of the country is so great that many of the best listed properties are subject to so-called bidding wars, with numerous buyers all vying to get the seller’s attention. In some cases, bidders are even writing personal offer letters directly to sellers to try and win them over.

But this tactic could backfire, according to some real estate professionals.

Many agents still advocate the advantages of an offer letter, saying it can help bidders to better connect with sellers. For example, Tracey Hampson, a real estate professional with Realty One Group Success in Valencia, California, told she once had a listing with three offers and favored the bid from a couple that said they’d just had their first child and wanted to raise him in a safe neighborhood. Hampson said she can relate to this, as she and her husband were once in a similar situation.

Personal letters can also be used to address any questions or concerns the seller may have about the buyer's ability to finance the home. The buyer can use the letter to offer reassurance of their intention to close and get the purchase financed.

But other real estate agents say that personal offer letters can also jeopardize a sale.

“There’s a belief that a letter tips the scales to the seller when negotiating the price and the inspection,” Karen Kostiw of Warburg Realty in New York City told “The seller may interpret the letter as the buyers ‘showing their hand,’ and it could weaken their position to negotiate.”

Some agents also say they advise clients not to write a personal letter due to fears it could lead to discrimination.

“Most letters consist of the buyers explaining their lives to add a touch of emotion to their otherwise dry contact, which is why it has worked so long,” said April Macowicz, a broker associate and team lead at the MAC Group RE in San Diego.

But the danger is that buyers could inadvertently reveal personal information that might prejudice 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 said, but “that doesn't mean that discrimination won't occur.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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