How To Write An Offer Letter When Buying A House
That's the one. You've found the house you want, and it's time to make an offer. Let's take this one step at a time. First, be aware you could be outbid. Naturally, sellers want the highest amount for their house, no matter how much you want it. Also, in a sellers' market, cash is king, according to The Washington Post, and if you're not offering cash, you could also be outbid. But what you have in your corner is a sincere interest in buying the home, and more, you're armed with information on how to write an offer.
Writing an offer is about strategy — what you are willing to pay vs. what you are willing to let go. It's helpful to draw up a list to determine your priorities. Is a big backyard more or less necessary than separate bedrooms for the kids? Is a large kitchen needing some updating more important than a smaller one that's picture-perfect? Only you can answer these questions based on your lifestyle and preferences. And when you find the house that positively addresses your expectations, you need to be ready to move by creating a winning offer.
What to include in your offer
Rocket Mortgage has a step-by-step list of considerations when making an offer. Relying on an experienced real estate agent is best, but if you write an offer on your own, it should include basics such as the full address and who will be on the title — you, maybe your spouse, or a third party. The letter should indicate if there are any contingencies. These are conditions the seller should meet before your offer is fully executed. Contingencies, meaning your conditions for taking ownership of the property, can include things such as a whole-house inspection or mold remediation. Your offer should also include the dates you expect your loan to go through and the date you expect to move in.
The sale of a house is a continuous back and forth until the title transfers from the current owner to the new owner. Whatever proposal or offer you give the seller, they have the right to respond with a counter-offer. Their offer may be a lower selling price or a negotiation of one or more of your contingencies. During this back-and-forth, working with a real estate professional comes in handy. If that's not possible, Lending Tree recommends working with the offer/counter-offer cycle.
Make it personal. Or not.
There is one additional aspect regarding generating an offer letter. While the facts and figures you offer regarding buying a house may be of interest, many sellers are deeply invested in their home and want to pass it along to someone who will love it as much as they do. Therefore, some buyers write a brief, descriptive letter that explains not only how much they appreciate the house and the work the current owner did to maintain it but also, sometimes they include information about their children and pets, how much their family would enjoy the house, and other personal details regarding their family.
Business Insider recently addressed this issue, indicating that buyers willing to share details about their family may personally connect with the seller, which may be key to gaining an edge over other offers. However, experts also indicate that a too detailed or personal letter can skate the edge of fair housing laws. For example, referring to the fact kids will enjoy playing in the backyard can set the buyer apart from other bidders who don't have kids. Referencing enjoying Christmas around the fireplace indicates religious affiliation. Any letter written for current owners should state facts or feelings about the house itself in order to avoid bias.