Ahh, the hand-written love letter. A true classic but also a dying breed. For reasons I know not, I’ve kept a small stack of them from past flames from days of yore. Posterity? Nostalgia? Proof? Maybe, or perhaps it’s just nice to know that some other human being took the time to write kind words about me.
Not all love letters are about other people though. Sometimes it can be someone writing about the love of a ‘thing’, like the love of a house or a neighbourhood. That may sound odd at first, but I can tell you that the real estate industry has its own version of the love-letter and we’re seeing it with increasing frequency.
In an effort to gain an edge in a competitive bidding war, some potential buyers are writing love letters to the sellers about the home that they wish to purchase. Sorry, their ‘dream’ home. Some of these letters can be real doozies and aim to pull on every heart string they can find. Most letters are short and sweet while others are like drawn out autobiographies, but they all aim to invoke the same feelings in the sellers. You’ll hear about the buyer’s family, how much they love the neighbourhood and how perfect your home is for their family.
So the question is: how effective are these letters?
The Good
If you’re a potential buyer, it’s hard to find much fault with the letter. This view is essentially the same argument as ‘Pascal’s Wager’ except we substitute the belief in God for the belief that these letters are effective. You have very little to lose other than a little bit of time and energy, but you have a whole lot to gain.
There have also been many accounts of these letters being the ‘difference-maker’. A recent Toronto Star article wrote about a young family who won a bidding war with a bid that was approximately $100,000 less than the top bid. The sellers were taken back by the young family’s letter and really wanted them to get them home, so they allegedly settled for much less.
Many real estate agents have also recounted success stories in which they believe the personal love letter that their clients wrote was the difference between winning and losing the home. They swear by it. I have serious doubts, but maybe I’m just anti-love.
The Bad
As a listing agent it’s not easy to be a fan of the love letter. Offer nights can be long and stressful for everyone involved so there’s nothing worse than some agent reading a lengthy personal letter to you as if they were telling a story to an elementary school class. We want to be as expeditious as possible on offer night so that people can get home to spend time with their families.
We also want our clients to make good decisions. Selling your home is an emotional experience, but we don’t want our sellers being swayed on offer night by anything that doesn’t pertain to the actual offer. The other prospective buyers may be great families as well who would be a great fit for your home and neighbourhood, they just simply didn’t write a letter.
The Ugly
People can and will write anything they want in a letter. People have also been known to not always be truthful, sadly. Listing agents and sellers aren’t verifying someone’s life story on offer night – ain’t nobody got time for that. So how much stock can one really put in these love letters?
We’ve heard some brutal stories about this tactic. One man allegedly convinced his aging neighbours to sell their adjoining semi-detached home to his ‘lifelong childhood friend’. He had a letter written explaining how they had families the same age and how they always wanted to have their children grow up together in a great neighbourhood. The seller agreed to sell it to the neighbour’s friend at a price seemingly less than market value.
A short while after closing, both semi-detached homes were demolished and a new larger detached home was built and sold at a premium price. The aging couple got duped out of top dollar price for their home, while the deceitful original buyer made a handsome profit.
The Conclusion
If you’re a buyer and you feel compelled to write a letter, do so. There’s really no disadvantage as nobody will get upset about you saying nice things about them and their home.
But if you don’t write a letter, please don’t feel like you’re at a disadvantage because you’re probably not. The contents of your offer are what truly matter and personal love letters are unlikely to have much effect.
I’ve asked some of my more emotionally inclined friends and family how they’d react to such a letter and they all generally said the same thing. They’d be wary of whether the contents of the letter were true. If they felt the buyer’s letter was genuine, and their offer was tied with another buyer as the top bids, they might lean towards the buyers with the love letter. Maybe.
So if you’re the type of buyer who likes to give themselves every possible miniscule advantage, maybe it’s time to put pen to paper before your next bidding war! Just know – it’s an incredible long-shot.