Why Homebuyers Should Write “Love Letters” to Sellers

The so-called “dear seller letter” is an oft-overlooked way for homebuyers to make their bid more competitive without increasing the dollar amount.

By Josh Sherman | 5 minute read

It might not be a silver bullet for winning every bidding war, but homebuyers should consider making a written appeal to anyone they want to purchase property from.

Around 2017, as the Toronto real estate market was on a tear, REALTOR® Mark Savel noticed a unique way that some buyers were trying to eke out an edge in the super competitive bidding process.

They were sending personal letters to home sellers Savel was representing. Each letter attempted to convince the seller that the bidder behind it was the right one to sell their home to. To Savel’s surprise, these notes worked — not only more than once but sometimes even if the bid wasn’t the highest dollar amount. “I saw the effectiveness of it when I was on the listing side,” Savel, a salesperson at Sage Real Estate Ltd., tells Wahi.

It didn’t take long for Savel to incorporate what are known as “deal seller letters” into his bidding process when representing clients on the buying side. “Without me experiencing it, I would [not believe it works],” he adds. Some of his clients have also been skeptical when he suggests that they put pen to paper. “They see it on TV, but they don’t think it’s an actual thing that people do in real life,” he says of dear seller letters.

Overall, such letters are meant to make an emotional appeal to the seller, to tug on their heart strings a little, and hopefully make the case that the letter writer is the best fit for the property. “What we’re trying to establish is a connection, so any type of similarities between the buyers and sellers that we can strike a chord with, that’s what we’re including,” says Savel.

Why Dear Seller Letters Are Effective 

In an industry like real estate, where so much focus is on the bottom line, how useful could something as personal as a dear seller letter be? “It’s probably the second biggest thing you could do,” says Savel, who notes that — no surprise — increasing your bid amount would be number one. The letters are effective because homebuying is partly an emotional process for all parties involved. “When we’re talking resale [transactions], a big percentage of the decision is emotionally based — both for the buyer and the seller,” Savel explains. “ The most shrewd, business-like seller might still consider a letter, in Savel’s experience. “I was pleasantly surprised by that,” he says. However, Savel notes that it really depends on the situation. For example, if your bid is $100,000 short of another, a letter probably isn’t going to help your cause. On the other hand, if your bid is competitive, a letter could tip the scales in your favour. “If you’re in the top three, that can be a good way of improving your chances without [increasing your bid amount].”

The Elements of Strong Dear Seller Letters

A strong dear seller letter is like a strong cover letter. It should be crafted to appeal to the specific seller in the same way that you might cater a cover letter to meet certain requirements in a job posting.

Savel has used dear seller letters so often in the past several years that he’s come up with a template for prospective buyers to fill out. Here are the elements of a strong seller letter:

• Intro: Briefly introduce yourself to the seller. 

• Future plans: Lay out what the coming years mean for you and how the home will figure into them. 

• Work history/finances: Although these letters are primarily about making connections, you should still include details about your financial situation because the relationship is still transactional. Let the seller know you’re already pre-approved for a mortgage. Highlight the fact that you have a well-paying job in a stable industry.

• Why you’re right for the home: Perhaps you’re an avid gardener who would love the opportunity to maintain a beautifully landscaped home’s yards, or a dedicated dog owner whose furry friend would love all the pooch-friendly amenities the condo building has to offer — get as specific as you’re comfortable with. 

• Photo: “With the letters, we like a photo of who the people are,” says Savel. The photo is a way to put a face to your story. If you mentioned earlier that you plan to raise your newborn in the house, you could include a current family photo. “Whether right or wrong, people obviously judge who’s buying their home, and having a photo could really strengthen your cause.”

Other Considerations 

Some aren’t in love with the idea of dear seller letters. The National Association of Realtors, for instance, suggests the additional paperwork comes with some potential risks. The letters can open the door to discrimination during the selling process, the association warns.

For those considering writing one, Savel suggests that a dear seller letter can be effective in any housing market, regardless of geography, size, or conditions. Here are a few other things to consider before putting on your writing cap. 

• You don’t have to use the letter format. A video or voice note that shows your personality can be just as effective.

   

• Honesty is the best policy. “You better back up what you say,” says Savel. “You don’t want to say, ‘I’m a horticulturist who’s going to take care of your garden,” and then they (the sellers) ask you a question on your second buyer visit and you’re like, “What do I say?”

   

• Dear seller letters aren’t just for bidding wars. “Even if it’s one-on-one negotiation and you’re not in a bidding war, just having that good rapport… can go such a long way,” says Savel. For instance, you could find out useful information about the home that the seller isn’t necessarily obligated to disclose, such as where the automatic sprinkler system is located. And, in some cases, Savel has even seen friendships form: “That little letter could open the door.”