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Normawalton

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It is no secret that the real estate markets in Toronto and Vancouver are red hot. Many properties are being sold for hundreds of thousands over the asking price and stories of heated bidding wars are rampant in both cities.

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Normawalton

  1. 1. Norma Jean Walton, do ‘dear seller’ letters work?
  2. 2. It is no secret that the real estate markets in Toronto and Vancouver are red hot. Many properties are being sold for hundreds of thousands over the asking price and stories of heated bidding wars are rampant in both cities. As someone with experience in the Toronto real estate sector, I am frequently asked by friends and colleagues who are in the process of purchasing a home, “Norma Jean Walton, how can I assure I get the house I want for a price I can afford?”
  3. 3. While there is no tried and true method in real estate to getting exactly what you want, there are some measures one can employ to raise one’s chances and, moreover, showcase oneself as the perfect person to buy the property. So, you have found a house you love in a great neighbourhood and, hey, it’s even somewhat affordable. What next? Time is of essence. While there is no guarantee that the first bid will be the one selected, being near the top of the offer list will assure that the seller has a chance to review your offer.
  4. 4. However, aside from numbers, how else can you the prospective buyer set your offer apart from others? In the last decade, there has been a growing trend towards, ‘Dear Seller’ letters, as some real estate markets became heavily saturated with buyers. These letters are drafted by the prospective buyer and often outline their affection, affinity and desire to purchase the house being sold. As Bloomberg reported last year, these letters can be so effective that some real estate agents try to intercept them to keep the focus on price.
  5. 5. “Nearly 4 in 10 home buyers facing off against other bidders included a love letter with their offer last year, according to national real estate brokerage Redfin,” Carla Fried of Bloomberg Business wrote in 2014. “In multiple-bid situations in 2013, Redfin found, bids with love letters were 9 percent more successful than bids without a letter.” Letters are successful because they create a connection between the potential buyer and seller. Winning bid letters have touted the architectural beauty of the home, have commented on unique features of the home and even praised owners for colour schemes and add-ons.
  6. 6. Those who have penned winning bid letters often learn a tidbit of information from the properties neighbours or realtors and include this specialized knowledge in the letter. One couple in the United States discovered that the seller had a child going to college and connected that fact with their own young child’s aspirations. Another couple, the Richards, won a bidding war with a bid $14,000 dollars below the asking price. They believe their hand crafted letter was the deciding factor. The letter read in part, "This offer range is a level that is stretching for us as a family, but we are doing so because this is a home for us, not a property investment.” The letter continued: "We wanted you to know that it is you and how you've made this your home that has appealed to us more than any other aspect."
  7. 7. Their bid won, and the seller even left them a table and lawnmower. With that said, there is a fine line between adoration and desperation. You want to come off as genuine, not needy. You may be asking, “Well, how do I tell the difference, Norma Walton?” Desperate letters are filled with grandiose declarations and even outlandish proposals. A pregnant buyer in the US offered to name their unborn child after the seller. Needless to say, she did not win the bid.
  8. 8. I advise that you talk about the things you love about the home you are interested in buying - the porch or the built- ins. Then, establish some sort of connection between you and the seller. Most importantly, be genuine. A well thought- out, hand-written letter is a rarity in our day and age, so remember a little goes a long way. Lastly, if you have apprehensions that the real estate agent will not deliver the letter, try sending it yourself or dropping it off in the seller’s mailbox.

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