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I agree success of that tactic probably varies based on the market, and I think you also need to have some knowledge of the seller and what matters to them and their motivations. And no matter what, aspects of the offer other than overall price, or an accompanying letter, might be what makes the difference. This would include how much needs to be financed.
I could not care less about your twins and that you're local to the area and want the twins to grow up here. I'm not originally local to the area and don't have kids and don't care about yours. And any obvious "tugs at the heart strings," no matter what they're about, would probably backfire with me.
On the other hand, I have some very nice landscaping which I did myself and to which I feel quite emotionally attached. Or, let's take it further and look at the example of a neighbor who recently sold - she'd been in the house for 40 years and had painstakingly cared for flower beds. They were really gorgeous showpiece gardens. I know she needed to downsize, but was really conflicted about handing over the gardens. In her case, a letter from a gardener promising to tend to the plants just as she did could possibly have made a difference. I think that's different from tugging at the heart strings - the seller is emotionally invested in the house and can't bear the thought of someone neglecting the gardens, so she chooses someone she thinks will care well for them. The same line of thought might go into picking an offer on one's house they built or renovated/restored themselves.
Still, no buyer should assume that the little 85-year-old gardener will go for such a letter. She might think, "I'm moving, I couldn't care less what happens to my gardens. Show me the money!" And I'm sure that for almost everyone, there is a point at which the money trumps everything. A few thousand difference? Maybe worth it to have "my" property continue to be cared for. $20K? No way.
In any case I can't imagine a letter backfiring to the point that a lower offer is chosen solely because the letter was annoying. So it probably can't hurt.
Years ago the sellers accepted my low ball in a flat market because I told the owners I loved the wallpaper. Every surface of the home including ceilings, closet interiors and walls were papered, all different and not in complimentary patterns or colors. I can't imagine how tired they were of hearing negative feedback about the papers.
I did love all the paper because I knew most people would not consider such a house and therefore there was no competition. Owners were motivated to move on with their lives and sold us their exceptionally well maintained 1920's Tudor with a new slate roof.
Only place I ever bought/ sold that did not have a single inspection issue.
Hmmm...I just saw this thread and thinking this may be a good idea since I'm offering a contract for deed offer. Should I write the letter with the first offer or wait until they reject me and write a letter? What did you all say in your letters to help you out?
Worked for me. Was up against 3 others and we wrote a letter, got the house. Found out we were 25k under highest bid as well.
Glad that worked for you, but wow, I simply do not get that kind of thinking on the sellers' part. 25,000 could pay for a bunch of trips to visit grandkids, pay for a year's tuition for a kid, buy me a new car, whatever.
Even if that's not a huge amount of money relative to an expensive property and even if I'm not very materialistic, you could still do a heck of a lot of good for a local charity with 25,000. I've got to be pretty darn stuck up about my house to think that it's more important to spend 25,000 to be sure the "right" buyer gets it than to spend the same amount on a donation to the local homeless shelter or whatever.
I suppose if the buyer's story was that they were foster parents for disabled kids who'd been removed from abusive homes, I could feel like I was doing some real good for society by giving them a discount. But if it was just that their twins would love to climb my oak tree or they were so impressed by the tastefulness of my velvet unicorn mural in the living room or whatever, not a chance.
I would imagine that it would be a one-in-a-million situation for a seller to actually accept a lower offer from among multiple bids due to a personal story. No matter how likable you are, it is taking money directly out of their pocket—not going to happen under normal circumstances!
However, I do know first-hand that interpersonal relations can have an effect on the buying process. A few years ago, my mom and I worked together to fix up and sell her mother’s/my grandmother’s former house. The first offer was from a couple that were just absolute jerks. They had very negative things to say about practically every aspect of the house. I expect they read somewhere that finding fault was a good negotiating tactic, or else they were just extraordinarily negative people. The offer was right on the border between a lowball and a reasonable price. After a couple of counters back and forth, the parties were only a couple of thousand apart (just under 1% of the total amount). If they had been nice, pleasant people I know with certainty that my mom would have come down to their price. But as it happens, they lost out because she hated to see her hard work go to such nasty folks. (The happy ending is that the house did eventually sell to a lovely family that raved about the meticulously-crafted updates and upgrades—for about $15,000 more than the negative-Nancies had offered)
I am a numbers guy, my wife is a feel good person. When we sold our house she almost told our buyers (who were paying our asking price with no closing costs) to take a flying leap because they were making some very reasonable requests. I think the fact that she had a good image of them in her head kept her from going over the deep end.
Selling a house is a stressful process. It never hurts to have a little good will built up.
That being said, I would have never sold it to them if I had a better offer. THAT being said, we did get an all cash offer, waiving home inspection, that netted about 10k less than them. The fact that the Realtor was an absolute jerk made the choice easy, and now that the process is closed and done with, I am glad that I didn't take the cash and run. Knowing a few things about how serious the buyers were about buying the house actually did help. I don't know what I would have done otherwise, but it doesn't hurt.
I would imagine that it would be a one-in-a-million situation for a seller to actually accept a lower offer from among multiple bids due to a personal story. No matter how likable you are, it is taking money directly out of their pocket—not going to happen under normal circumstances!
I think it's much more often than you think. I had a deal with a home that had been on the market a while, dropped the price, then 4 offers came in over the weekend. They were not phantom offers, I knew 2 of the other agents that made offers.
My clients wrote a letter about how they had rented in this area for 3 years and knew the neighborhood well. They had twin girls attending the local school and were really excited about this house and the girls having that giant bonus room to play in.
The sellers took my clients offer over another that was $5K higher. According to the agent this was because:
- The sellers felt the buyers were more serious and more likely to close because they knew the neighborhood and needed to stay close for the schools. This is important here where our default contract terms give the buyers 17 days to cancel for inspection reasons - which could include almost any reason including "upon further inspection, I didn't like the neighborhood".
- They loved the idea of the twin girls playing in the giant bonus room.
- They knew me and trusted me as an agent.
Without the letter, I am sure the sellers would have taken the higher offer.
Glad that worked for you, but wow, I simply do not get that kind of thinking on the sellers' part. 25,000 could pay for a bunch of trips to visit grandkids, pay for a year's tuition for a kid, buy me a new car, whatever.
Even if that's not a huge amount of money relative to an expensive property and even if I'm not very materialistic, you could still do a heck of a lot of good for a local charity with 25,000. I've got to be pretty darn stuck up about my house to think that it's more important to spend 25,000 to be sure the "right" buyer gets it than to spend the same amount on a donation to the local homeless shelter or whatever.
I suppose if the buyer's story was that they were foster parents for disabled kids who'd been removed from abusive homes, I could feel like I was doing some real good for society by giving them a discount. But if it was just that their twins would love to climb my oak tree or they were so impressed by the tastefulness of my velvet unicorn mural in the living room or whatever, not a chance.
I agree and suspect there were other differences in the offers than the $25K and the letter. One buyer may not appear as well-qualified as another, may signal that they will be trouble after the inspection, etc.
I do "get" the idea that selling to a developer vs. owner occupants may make a little $ difference, especially if the sellers remain in the neighborhood or remain friends with the current neighbors, who may strongly oppose a tear-down and McMansion built. But usually developers are not willing to pay as much as owner-occupants, so this would be rare.
I think it's much more often than you think. I had a deal with a home that had been on the market a while, dropped the price, then 4 offers came in over the weekend. They were not phantom offers, I knew 2 of the other agents that made offers.
My clients wrote a letter about how they had rented in this area for 3 years and knew the neighborhood well. They had twin girls attending the local school and were really excited about this house and the girls having that giant bonus room to play in.
The sellers took my clients offer over another that was $5K higher. According to the agent this was because:
- The sellers felt the buyers were more serious and more likely to close because they knew the neighborhood and needed to stay close for the schools. This is important here where our default contract terms give the buyers 17 days to cancel for inspection reasons - which could include almost any reason including "upon further inspection, I didn't like the neighborhood".
- They loved the idea of the twin girls playing in the giant bonus room.
- They knew me and trusted me as an agent.
Without the letter, I am sure the sellers would have taken the higher offer.
For each one of these anecdotes, I would like to hear if there were any other differences in terms offered. In other words, I would like to know whether letters matter when all other factors other than offer $ and the letter, are equal. And I would like to hear any anecdotes where (a) the buyer and agent did not know (verified) the value of other offers (very typical in my metro area) or (b) a letter made no difference and the seller went with the higher offer.
I do "get" the idea that selling to a developer vs. owner occupants may make a little $ difference, especially if the sellers remain in the neighborhood or remain friends with the current neighbors, who may strongly oppose a tear-down and McMansion built. But usually developers are not willing to pay as much as owner-occupants, so this would be rare.
Sometimes a large property with a small, 50 year-old house is less attractive to someone who plans on living there. A developer may be willing to pay more because they can triple the square footage and make out like bandits. If the sellers are emotionally attached, it's reasonable that there be a financial trade-off for keeping the house intact.
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