Personal letters to the sellers of your house can work!!!

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barnaclebob
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Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 10:01 am

Sorry for the wall of text but I just want to share the story we just went through this week as a data point for people looking to buy a house. Main points are at the bottom if you want to skip.

The wife and I semi regularly browse Zillow to see how close we are to being able to afford our dream house and based on all listings for the past year or two we were still at least 2 years out if not 4. I got bored at work Monday, logged in to Zillow and saw a house on the market for two days that was at the top end of what we could afford right now and it was located right next to the water where it should have the amazing view that we want. Of course I clicked to see what was wrong with it but holy cow it looked amazing. The house had everything on our want list except for a 1 car garage instead of two but it had plenty of off street parking space and it didn't require any remodeling.

I called the wife who was sleeping at home from taking the day off sick and said wake up, you need to see this house. An hour later I was on the phone out of the blue to the realtor who we used to buy our current house 8 years ago. 2 hours after that we were touring the house and it was even better in person. At least 3 other families came to view it by the time we left and my realtor said there was already one offer on the house. All offers would be reviewed Thursday.

We drafted up an offer Tuesday evening planning to offer 25k over asking. The realtor advised that we should get a pre-inspection to eliminate an inspection contingency in this hot market as the other offer had already done a pre-inspection. A pre-inspection is a full inspection except instead of getting a full report you follow the inspector around and take the notes and pictures instead of him. To boot it was $300 cheaper than a full inspection. The house was likely one of the very first in the area, built over 100 years ago, lifted and a basement added in the 20's, then a second story added in the 40's. Given all of this it was in mint condition with fairly modern utilities aside from some ungrounded outlets in the living areas. The kitchen and baths, all modern. The only big potential project is doing a seismic retrofit to secure the house to the foundation which we have the cash for immediately.

The offer was placed Thurday morning and the review was at 3:00PM. Our realtor called us from his Mexican vacation (left on wed) around 5:30PM to let us know that there were 2 other offers but our offer would be accepted if we put up 25k of earnest money instead of 10k because the seller wanted to make sure we were committed. Also they wanted us to initial some of the disclosure appendixes. No problems there but here's the kicker. Our offer was the lowest of all three. The first offered $80k!!! more than we did but they had a contingency to sell their current house. This is no bueno in a hot market. The second offer was also a little more than ours and equivalent on contingencies but my awesome wife had insisted on drafting up a personal letter to the seller to include with the offer explaining why we loved the house so much, how wanted to live in it long term, and give it the care it deserves. The seller loved our letter and that was apparently the difference maker.

I know that the house isn't ours until we've got keys in hand and that all kinds of things can go wrong but there shouldn't be too many booby traps in closing on our end thanks to the past 10 years of DINK boglehead lifestyle. We will be going from "house rich" to "house middle class" and are fine with that. 401k contributions will temporarily go down to 20% of gross pay instead of 30% while we rebuild our taxable account. We'll be able to retire when this house is paid off by the time we are 50.

TLDR:

A good realtor can be worth the cost vs negotiation on your own to not have to pay as much commission. We could never have moved this fast out of the blue on our own and not having a realtor might have made us look less reliable to the seller.

Even after your offer is accepted try ordering a pre inspection instead of a full inspection to save a few hundred dollars. I'm not sure if inspectors will like doing a pre inspection after you are on contract but its worth a shot.

Write a personal letter to the seller, it can't hurt if you do it properly. Basically don't mention any remodel plans you may have in case you talk about demolishing something the seller loves.

I didn't know this and its now obvious but in a hot market you'll need cash for the down payment. In my mind the proceeds from our current house plus the cash we bring to the table is our "down payment" In the banks eyes, only the cash is. Thanks to bogleheadism we have over 20% cash on hand, the proceeds from our house will put us over 50% equity right away once our house sells and we pay off any temporary loans.

We have a natural disposition to save but thanks to the optimization strategies learned on this forum we are very likely to be moving into a "This Old House" quality house in a month and couldn't be more excited.
Last edited by barnaclebob on Fri Nov 10, 2017 2:18 pm, edited 2 times in total.

mak1277
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Re: Personal letters to the sellers of your house can work!!!

Post by mak1277 » Fri Nov 10, 2017 10:19 am

Never say never, but I am 99% certain I will never: make an offer above asking price or waive inspection contingency. Those are two things I'm just not comfortable with and I'm willing to miss out on any house that requires it.

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Sandtrap
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Re: Personal letters to the sellers of your house can work!!!

Post by Sandtrap » Fri Nov 10, 2017 10:25 am

:sharebeer
congratulations on your new, "This Old House".
j :D

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 10:42 am

mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price or waive inspection contingency. Those are two things I'm just not comfortable with and I'm willing to miss out on any house that requires it.
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it. I actually prefer the pre inspection process now as it was fairly cheap and eliminates another round of negotiations within the closing period.

Also it was definitely priced below what it would sell for and offering asking would have been pointless. We could have done an escalation offer but figured it was best to just come out strong and hope for the best.
Last edited by barnaclebob on Fri Nov 10, 2017 10:47 am, edited 1 time in total.

mak1277
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Re: Personal letters to the sellers of your house can work!!!

Post by mak1277 » Fri Nov 10, 2017 10:45 am

barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price or waive inspection contingency. Those are two things I'm just not comfortable with and I'm willing to miss out on any house that requires it.
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it.

Also it was definitely priced below what it would sell for and offering asking would have been pointless. We could have done an escalation offer but figured it was best to just come out strong and hope for the best.
But without a contingency, would you have been able to walk away from the deal if there was something serious wrong that the seller was unable to fix?

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jfn111
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Re: Personal letters to the sellers of your house can work!!!

Post by jfn111 » Fri Nov 10, 2017 10:46 am

mak1277 wrote:
Fri Nov 10, 2017 10:45 am
barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price or waive inspection contingency. Those are two things I'm just not comfortable with and I'm willing to miss out on any house that requires it.
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it.

Also it was definitely priced below what it would sell for and offering asking would have been pointless. We could have done an escalation offer but figured it was best to just come out strong and hope for the best.
But without a contingency, would you have been able to walk away from the deal if there was something serious wrong that the seller was unable to fix?
You're doing the Inspection before the offer so of course you can walk away.

mak1277
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Re: Personal letters to the sellers of your house can work!!!

Post by mak1277 » Fri Nov 10, 2017 10:48 am

jfn111 wrote:
Fri Nov 10, 2017 10:46 am
mak1277 wrote:
Fri Nov 10, 2017 10:45 am
barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price or waive inspection contingency. Those are two things I'm just not comfortable with and I'm willing to miss out on any house that requires it.
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it.

Also it was definitely priced below what it would sell for and offering asking would have been pointless. We could have done an escalation offer but figured it was best to just come out strong and hope for the best.
But without a contingency, would you have been able to walk away from the deal if there was something serious wrong that the seller was unable to fix?
You're doing the Inspection before the offer so of course you can walk away.
Ah, got it. That makes sense then.

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 10:50 am

jfn111 wrote:
Fri Nov 10, 2017 10:46 am
mak1277 wrote:
Fri Nov 10, 2017 10:45 am
barnaclebob wrote:
Fri Nov 10, 2017 10:42 am

The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it.

Also it was definitely priced below what it would sell for and offering asking would have been pointless. We could have done an escalation offer but figured it was best to just come out strong and hope for the best.
But without a contingency, would you have been able to walk away from the deal if there was something serious wrong that the seller was unable to fix?
You're doing the Inspection before the offer so of course you can walk away.
This is correct. Had we seen any huge issues that would have required an immediate fix for more than we were comfortable spending we would have adjusted our offer to compensate or not made an offer. For example we had considered going up to 50k over asking but learned that the house was likely not bolted to the foundation (very common in old homes). We are in an earthquake zone and it will require $10-25k to fix so we decided that we would stick with our initial feel of 25k over so that we would have some cash on hand to fix it if accepted.

The only risk to a pre inspection is that you still have to pay for it even though you might not have your offer accepted. It cost us about half of a normal inspection, less than $300. For any house I'm serious enough to offer on that's a small cost.

spectec
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Re: Personal letters to the sellers of your house can work!!!

Post by spectec » Fri Nov 10, 2017 11:30 am

I had never thought of a letter to the sellers until we sold our house last year and our buyers attached a letter to their offer. Their offer was slightly stronger than a competing offer (exact same price, but larger down payment on their loan), and we probably would have accepted it anyhow, but the letter was a nice extra touch. It would probably have swung the deal if the two offers had been close to identical.

The really nice thing was that when we met for the walk-through, and eventually at the closing, we all felt as though we already knew one another.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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Pajamas
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Re: Personal letters to the sellers of your house can work!!!

Post by Pajamas » Fri Nov 10, 2017 11:34 am

mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price
Local markets vary and even a local market can vary depending on the state of the local market. In some areas, asking prices are set low to encourage offers but the selling price is significantly higher, basically like an auction. If you refused to make an offer over asking price, it would be almost impossible to buy anything.

margered
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Re: Personal letters to the sellers of your house can work!!!

Post by margered » Fri Nov 10, 2017 11:38 am

Often there are government programs to subsidize the cost of a seismic retrofit.

mak1277
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Re: Personal letters to the sellers of your house can work!!!

Post by mak1277 » Fri Nov 10, 2017 11:40 am

Pajamas wrote:
Fri Nov 10, 2017 11:34 am
mak1277 wrote:
Fri Nov 10, 2017 10:19 am
Never say never, but I am 99% certain I will never: make an offer above asking price
Local markets vary and even a local market can vary depending on the state of the local market. In some areas, asking prices are set low to encourage offers but the selling price is significantly higher, basically like an auction. If you refused to make an offer over asking price, it would be almost impossible to buy anything.
Hence the 1% chance I left open.

stan1
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Re: Personal letters to the sellers of your house can work!!!

Post by stan1 » Fri Nov 10, 2017 11:44 am

Definitely helps when the house is special to the seller and you have a good story to tell: kids, want to be part of close neighborhood, will take care of a historic home. Also helps if you can learn a little about the seller to find out you have an affinity (physicians sometimes prefer to sell to other physicians, etc.)

Broken Man 1999
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Re: Personal letters to the sellers of your house can work!!!

Post by Broken Man 1999 » Fri Nov 10, 2017 12:09 pm

Congrats on your home buying. It is always nice to see a something that isn't required perhaps tip the scales in your favor. Also it seems like this is your dream home, always nice to have a shot at getting what you want, and not having to settle for something that wasn't exactly what you desired.

Hopefully everything will work out and you will soon be in your new home.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 12:39 pm

margered wrote:
Fri Nov 10, 2017 11:38 am
Often there are government programs to subsidize the cost of a seismic retrofit.
Thanks for the tip, I'll see if any are available here.

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hand
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Re: Personal letters to the sellers of your house can work!!!

Post by hand » Fri Nov 10, 2017 12:59 pm

Congratulations and good luck!

I'm always interested in buying / selling stories since the reality is often more complex and interesting than the theoretical idealized transaction.

I can't help but thinking that you are "burying the lede" with your "personal letter" headline.

I'm sure the letter helped, but to me the biggest lesson here is that there are tangible rewards to fiscal prudence:
Able to buy a house today because you found the right deal - sure!
Have cash to more than double your down payment - no problem!
Able to take on risk of an older house with significant potential expenses -why not!

While the rewards may not be evident on a daily basis, for you this is a pretty big one-off event that will pay dividends for years to come.

dpc
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Re: Personal letters to the sellers of your house can work!!!

Post by dpc » Fri Nov 10, 2017 1:17 pm

We sold our house about three years ago in a great seller's market. We had three offers the first day, two above the asking price - both cash. We got two "heartfelt" letters from the potential buyers about how much they loved the house. We didn't pay much attention to the letters and went with the highest cash offer. It was from a couple who wrote one of these letters. They lived in the house less than 18 months, doing virtually nothing and flipping it at a higher price.

Congrats on the house. Glad your letter worked, but seems like just another tactic based on my experience.
"Worrying is like paying interest on a debt that you might never owe" -- Will Rogers

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 1:36 pm

hand wrote:
Fri Nov 10, 2017 12:59 pm
I'm sure the letter helped, but to me the biggest lesson here is that there are tangible rewards to fiscal prudence:
For sure fiscal prudence put us in a position to be competitive and all I know is that my realtor said the other competing offer was equivalent but slightly higher in price and she wanted to sell to us because of what we said.
dpc wrote:
Fri Nov 10, 2017 1:17 pm
We got two "heartfelt" letters from the potential buyers about how much they loved the house. We didn't pay much attention to the letters and went with the highest cash offer. It was from a couple who wrote one of these letters. They lived in the house less than 18 months, doing virtually nothing and flipping it at a higher price.

Congrats on the house. Glad your letter worked, but seems like just another tactic based on my experience.

Everything my wife wrote in the letter was true so we've got clean consciences but I can see how people would lie on them just to try to get an advantage. Anything can happen, we could both loose our jobs or something and have to move out but we intend to stay put and make this place ours.

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Re: Personal letters to the sellers of your house can work!!!

Post by an_asker » Fri Nov 10, 2017 2:03 pm

dpc wrote:
Fri Nov 10, 2017 1:17 pm
We sold our house about three years ago in a great seller's market. We had three offers the first day, two above the asking price - both cash. We got two "heartfelt" letters from the potential buyers about how much they loved the house. We didn't pay much attention to the letters and went with the highest cash offer. It was from a couple who wrote one of these letters. They lived in the house less than 18 months, doing virtually nothing and flipping it at a higher price.

Congrats on the house. Glad your letter worked, but seems like just another tactic based on my experience.
I think the lesson to be learned is that if there are multiple "heartfelt" letters, go with the lower offer. They will be the "real MCoy heartfelt" letter writers, like OP here.

Congratulations on the house, Barnaclebob! I'm confused by your statement about going from "house rich" to "house middle class" - is it not the other way around?

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 2:07 pm

an_asker wrote:
Fri Nov 10, 2017 2:03 pm
Congratulations on the house, Barnaclebob! I'm confused by your statement about going from "house rich" to "house middle class" - is it not the other way around?
I was trying to say that with our current house we are at the opposite end of "house poor" where you are living near paycheck to paycheck because of a large house payment. Right now we are paying almost double what the mortgage requires along with plenty of disposable income and maxing retirement savings thus "house rich". The min payment on the new house is looking to be about $250 more per month than what we are paying now so our cashflow should be about the same except we don't have the option to pay less if we wanted. We'll also be paying for another 15-20 years instead of paying our current house off in around 4 years.

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celia
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Re: Personal letters to the sellers of your house can work!!!

Post by celia » Fri Nov 10, 2017 2:31 pm

barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it. I actually prefer the pre inspection process now as it was fairly cheap and eliminates another round of negotiations within the closing period.
But isn't the advantage of having a written inspection report done by a third party a way to improve negotiations in your favor? By not having a written report, you find out what the known problems are but it is assumed you will cover the cost of fixing them. You are buying the house as-is.

Did you ask any neighbors if they've noticed any plumber/electrician/roofer trucks servicing the house lately? It would be good if the needed work was completed, but not good, if the recommended work wasn't done.

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 3:05 pm

celia wrote:
Fri Nov 10, 2017 2:31 pm
But isn't the advantage of having a written inspection report done by a third party a way to improve negotiations in your favor? By not having a written report, you find out what the known problems are but it is assumed you will cover the cost of fixing them. You are buying the house as-is.

Did you ask any neighbors if they've noticed any plumber/electrician/roofer trucks servicing the house lately? It would be good if the needed work was completed, but not good, if the recommended work wasn't done.
Negotiations weren't going to be in my favor no matter what. This seller wasn't going to do a thing so the offer had to be for the as is house. Contingencies kill deals here right now so you have to check up front. It sucks for buyers by why would a seller take on more headache? Knock on wood but my only real unknowns are the sewage pipe and some exterior drainage pipes. Other surprises are expected anytime you open a wall though.

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Leesbro63
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Re: Personal letters to the sellers of your house can work!!!

Post by Leesbro63 » Fri Nov 10, 2017 3:48 pm

This thread is amazing to me. Here in Pittsburgh, even with a recent mini-run-up in prices, sellers just don't have that kind of power. And I would NEVER EVER buy a house without an inspection. Interesting how real estate markets are so different in different parts of the country.

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 4:04 pm

Leesbro63 wrote:
Fri Nov 10, 2017 3:48 pm
This thread is amazing to me. Here in Pittsburgh, even with a recent mini-run-up in prices, sellers just don't have that kind of power. And I would NEVER EVER buy a house without an inspection. Interesting how real estate markets are so different in different parts of the country.
A lot depends on the individual house because houses with decent views but bigger with flashier amenities sit for much longer. You'll have to trust me that this is amazing house priced to sell and one that many mortals can afford which made it very competitive. When I bought my current house in 2009 right in the middle of crash I actually didn't even have much power because the house was easily the nicest in our price range. Ended up paying a little over asking so that the buyers would cover closing costs. I was low on cash at the time but had good income.

2015
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Re: Personal letters to the sellers of your house can work!!!

Post by 2015 » Fri Nov 10, 2017 4:07 pm

One of the advantages of living in one of the trendiest parts of the country where new trendoids are moving every day is I can ruthlessly extract as much of every last quarter penny out of buyers as I can when I sell soon. At most, I might scoff at a heartfelt letter because if you want to live here you've got to be prepared to pay the price. OTOH, as I will have the good fortune of moving to an area that is a buyer's market, I will definitely use this letter "tactic" to get a lower price on a dream place than I might not otherwise. Thanks for posting.

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Re: Personal letters to the sellers of your house can work!!!

Post by TravelGeek » Fri Nov 10, 2017 4:20 pm

dpc wrote:
Fri Nov 10, 2017 1:17 pm
We sold our house about three years ago in a great seller's market. We had three offers the first day, two above the asking price - both cash. We got two "heartfelt" letters from the potential buyers about how much they loved the house. We didn't pay much attention to the letters and went with the highest cash offer. It was from a couple who wrote one of these letters. They lived in the house less than 18 months, doing virtually nothing and flipping it at a higher price.
We sold our home nearly three years ago, in a strong seller’s market. Got about a dozen offers, and one stood out because of the letter. It was not the highest bidder, but I a first liked the idea of knowing a tiny bit about the prospective buyer. Out of curiosity I looked up the sender’s address. It was a much nicer home in a much nicer part of town (and not a rental). Had me question how much they really wanted to move into our home vs. buying it as an investment. Another bidder was a colleague of my wife’s. In the end we ignored everything but the financial facts - the highest all cash offer, without contingencies, got the deal. I sometimes think the colleague would have been a better choice.

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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 4:27 pm

2015 wrote:
Fri Nov 10, 2017 4:07 pm
One of the advantages of living in one of the trendiest parts of the country where new trendoids are moving every day is I can ruthlessly extract as much of every last quarter penny out of buyers as I can when I sell soon. At most, I might scoff at a heartfelt letter because if you want to live here you've got to be prepared to pay the price. OTOH, as I will have the good fortune of moving to an area that is a buyer's market, I will definitely use this letter "tactic" to get a lower price on a dream place than I might not otherwise. Thanks for posting.
For sure letters would have less impact on someone selling an average house in a trendy area where the location is the only real price differentiator. Saying you really want to live in SODO SOPA and love the house doesn't really mean much if all the houses are the same.

A letter likely wont get you a much lower price buying but be the tipping point in a virtual tie. I cant say that I wouldn't take 5k less for someone who told me they have been dreaming of a garden, mini orchard, and chickens, and a giant apron sink and I believed them. At the very least it would let me believe our hard work in the garden would live on. We aren't all robots after all.

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Leesbro63
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Re: Personal letters to the sellers of your house can work!!!

Post by Leesbro63 » Fri Nov 10, 2017 4:33 pm

I can't imagine kissing someone's ear like that to BUY something from them. I'm pretty practical, but if I had to kiss like that, to move, I'd stay put.

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 5:10 pm

Its for sure not a requirement to do this. We felt we had a marginal chance at getting the house and thought it wouldn't hurt to try to express our genuine love of the house. Like it or not most humans have emotions and I consider it a courtesy to let the seller know the house is in good hands like she wants it to be.

I'll have to post an update if it turns out to be a money pit and the honeymoon ends though lol.

quantAndHold
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Re: Personal letters to the sellers of your house can work!!!

Post by quantAndHold » Fri Nov 10, 2017 8:02 pm

celia wrote:
Fri Nov 10, 2017 2:31 pm
barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
The pre inspection was literally the same thing as a full inspection except with no report at the end. We just asked questions and took notes/pictures as we went. We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it. I actually prefer the pre inspection process now as it was fairly cheap and eliminates another round of negotiations within the closing period.
But isn't the advantage of having a written inspection report done by a third party a way to improve negotiations in your favor? By not having a written report, you find out what the known problems are but it is assumed you will cover the cost of fixing them. You are buying the house as-is.

Did you ask any neighbors if they've noticed any plumber/electrician/roofer trucks servicing the house lately? It would be good if the needed work was completed, but not good, if the recommended work wasn't done.
I just sold a house in this kind of market. Six offers in a week, all for more than the listing price (which we thought was a fair price, in line with the comps). 3 of the offers were for more than 10% above the listing price. 5 came with personal letters. A written inspection report wouldn't have done anything for any of the buyers, since if any one of them had put any contingencies into their offer, we would have just gone on to the next offer.

The people with the winning offer did a very thorough preinspection, including a sewer scope. They retrieved all the permits for all the remodels that had been done through history, got the records from the decommissioning of the oil heater that was original with the house. They knew as much about what they were buying as any buyer could have. If there was any work recommended by the inspector, we didn't hear about it, from them or any of the other prospective buyers. The buyers included a personal letter, which was a nice letter, but wouldn't have swayed us towards them if they hadn't also been the best offer financially.

Having just gone through this process as a seller, here's my opinion on personal letters. I think in a nutty market like barnaclebob was just in, they're the price of admission, and can sway things if the offers are close. I think if we had two similar offers, one with a good letter, one without, we would have chosen the one with the better letter. But...one of the offers we got came with an okay personal letter from the buyers, but also with a several page, weird, rambling letter from the agent, that reinforced our agent's feeling that this particular agent was someone he didn't want to work with. The agent's letter would probably have disqualified these buyers. So there's that...if you're going to write a personal letter, don't be crazy.

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Watty
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Re: Personal letters to the sellers of your house can work!!!

Post by Watty » Fri Nov 10, 2017 8:53 pm

Congratulations on the house but you have to take what the real estate agents said about the other offers with a grain of salt since you will never know the details of what all was really in the other offers.

They very likely gave the other buyers a chance to beat your offer and terms but none of them did, or there was something about the other buyers that made the seller feel uncomfortable with dealing with them.

By saying things to make you feel "lucky" that you got the house you are less likely to get buyers remorse and try to find a way to get out of the deal.

If they came back and just said that you were the highest bidder and no one else was willing to pay that much then your post might have been much different with you wondering if you had made a mistake.

Within reason though the price might not be all that important if it is a great house with a view that would be a rare find.

Nate79
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Re: Personal letters to the sellers of your house can work!!!

Post by Nate79 » Fri Nov 10, 2017 9:31 pm

My guess is you actually don't have half the story. Not sure why the seller would take a lower offer with similar contingencies. Probably they were playing with the buyers and you won out somehow. While it's possible the letter made a difference but personally I would have laughed at it if a buyer tried that on me.

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Fri Nov 10, 2017 9:46 pm

A appreciate the skepticism and can see where you are coming from. You'll just have to trust that this objectively a special house, literally one of the first houses in the area. The house was just too much for the seller and she probably really didn't need an extra 5 or 10k (~1% of the price) If I had to sell this place someone who expressed appreciation for the house and made it feel genuine would give them a little bit of an advantage too.

There was no possibility of buyers remorse or backing out even if we were the highest bidder. The real estate agent is very established for the area. If he doesn't get his payday he won't lose sleep over it. He literally didn't say anything to try to sell the house, all you have to do was look out the windows.

letsgobobby
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Re: Personal letters to the sellers of your house can work!!!

Post by letsgobobby » Fri Nov 10, 2017 10:12 pm

We didn’t write a personal letter but did make it clear that we had a ‘story’ that would ‘honor’ the previous owners’ vision for their property. They went with our offer even though it was $20k less than their highest offer.

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CaliJim
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Re: Personal letters to the sellers of your house can work!!!

Post by CaliJim » Sat Nov 11, 2017 12:00 am

We got a letter from the folks who bought our house. It turned out to be TOTAL BS about how excited they and the kids were about living in the neighborhood. After escrow closed... they put it up for rent
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toast0
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Re: Personal letters to the sellers of your house can work!!!

Post by toast0 » Sat Nov 11, 2017 12:54 am

barnaclebob wrote:
Fri Nov 10, 2017 10:42 am
We didn't however have time to do a sewer scope which would have been a separate cost. If the pipe collapses soon it will suck but we can deal with it.
When we bought our house, we had the sewer checked and it looked fine, but not too long later, we had a nasty backup; the house had been vacant for quite some time so tree roots coming in the pipe at the joints had thinned out -- once we started using the pipes, the tree roots grew back and caused a problem :(

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Re: Personal letters to the sellers of your house can work!!!

Post by msk » Sat Nov 11, 2017 1:44 am

I find it bizarre that esate agents still live on, with those ridiculously high commissions. And then the lawyer fees. You can plonk a million $ in an ETF in a couple of minutes...

Last house I bought was directly from the owner. My daughter lived in the area and noticed the classified ad. Asking price $1.05million, much of the value being from a superb ocean view. Without the view the house would go for perhaps $600k. She referred the ad to me thousands of miles away on the other side of the world. Zapped an email to the owner and asked DD to check out the view. Response, WOW! Paid for a full written inspection and made my email offer of $850k. Owner felt insulted :annoyed House had been listed earlier though an estate agent for $1.25m. Only half hearted bids. Anyway, furious email correspondence led to a deal for $950k including all furniture. I never did see the house before moving in a couple of weeks later. He moved into a motel. Moral? Pre-inspections are very worthwhile in order to firm up exactly how much you are willing to pay. The cost is trivial considering what you are about to spend, and a contingency bid does lower your bid in the mind of the seller. Would I add value for a personal letter? No. But it's still a mystery to me why estate agents continue to thrive :confused

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Re: Personal letters to the sellers of your house can work!!!

Post by White Coat Investor » Sat Nov 11, 2017 1:55 am

I think I've seen this movie and I know how it ends. In 2006 we were looking at a town home and thinking maybe it was a little overpriced. Then we found out the buyer offered more than asking price. Well, you know how that ended. We bought a different one, got a much better deal on it, but still sold it for 20% less 9 years later.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Personal letters to the sellers of your house can work!!!

Post by TheGreyingDuke » Sat Nov 11, 2017 2:32 am

Put me down as one who is skeptical about the value of most so-called home inspections. There may be exceptions but...

One example, my son and daughter-in-law were buying a house and we were all there during the house inspection. I followed the inspectors around, they didn't do much more than flip some switches, look in the attic crawl space, and note the service entrance and the like. When I pointed out a large tree in the yard that looked unhealthy they added that, when I noted an outdoor staircase without a railing, they noted that. When I spotted some moisture around a chimney, they added that. Totally useless, IMHO.

I have other similar data points.

In NY home inspectors are not allowed to comment on structural defects, that is in the purview of architects or engineers. I would sooner find one of these professionals, one who has some expertise in inspections, and pay the somewhat larger fee.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

msk
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Re: Personal letters to the sellers of your house can work!!!

Post by msk » Sat Nov 11, 2017 3:46 am

IMHO always ask for a written report. In most locations they are then legally liable. Oral????

Bigbonds
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Re: Personal letters to the sellers of your house can work!!!

Post by Bigbonds » Sat Nov 11, 2017 7:16 am

This sounds like it’s a California market and as someone from Texas I still can’t get it. I wouldn’t even offer more than the Zillow estimate much less more than asking price. I agree with others that this feels eerily similar to pre 2008. Maybe the new norm will be for housing to go through booms and busts like the stock market on a 2008 level?

letsgobobby
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Re: Personal letters to the sellers of your house can work!!!

Post by letsgobobby » Sat Nov 11, 2017 9:09 am

There is a lot of cash in the economy but to me this feels nothing like 2006. That was a credit bubble par excellence. This is just housing exuberance. I do not think we are about to see prices tank nationally, barring a catastrophic black swan.

Bigbonds
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Re: Personal letters to the sellers of your house can work!!!

Post by Bigbonds » Sat Nov 11, 2017 11:03 am

letsgobobby wrote:
Sat Nov 11, 2017 9:09 am
There is a lot of cash in the economy but to me this feels nothing like 2006. That was a credit bubble par excellence. This is just housing exuberance. I do not think we are about to see prices tank nationally, barring a catastrophic black swan.
Isn’t that exactly what people were saying around 2006? “This time is different”? :oops:

Carefreeap
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Re: Personal letters to the sellers of your house can work!!!

Post by Carefreeap » Sat Nov 11, 2017 11:21 am

Bigbonds wrote:
Sat Nov 11, 2017 7:16 am
This sounds like it’s a California market and as someone from Texas I still can’t get it. I wouldn’t even offer more than the Zillow estimate much less more than asking price. I agree with others that this feels eerily similar to pre 2008. Maybe the new norm will be for housing to go through booms and busts like the stock market on a 2008 level?
Lol, that's not new, that IS the normal.

Real estate is always local but national (and world) economic trends usually track. During my lifetime (56) I've experienced 3 and definitely feel we're ready for the next one.

Hang on and enjoy the ride!

letsgobobby
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Re: Personal letters to the sellers of your house can work!!!

Post by letsgobobby » Sat Nov 11, 2017 2:03 pm

Bigbonds wrote:
Sat Nov 11, 2017 11:03 am
letsgobobby wrote:
Sat Nov 11, 2017 9:09 am
There is a lot of cash in the economy but to me this feels nothing like 2006. That was a credit bubble par excellence. This is just housing exuberance. I do not think we are about to see prices tank nationally, barring a catastrophic black swan.
Isn’t that exactly what people were saying around 2006? “This time is different”? :oops:
This time is not different. 2006 WAS different. That’s the difference. 8-)

barnaclebob
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Re: Personal letters to the sellers of your house can work!!!

Post by barnaclebob » Sat Nov 11, 2017 3:58 pm

To all of the naysayers, my wife just got off the phone with the seller to ask if we could come bring my in-laws by and thank her in person. She sounds like an amazingly nice woman who was genuinely happy for us to buy the house and she mentioned things we wrote in the letter. While of course people can BS in a letter I am convinced that this one got us the house.

nativenewenglander
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Re: Personal letters to the sellers of your house can work!!!

Post by nativenewenglander » Sat Nov 11, 2017 4:13 pm

We recently sold a house as part of an estate. The house went on the market on a Friday, there was an open house on Sunday. The offers ranged from $10,000 over asking to almost $70,000. We took the one for $60,000, as they were first time homeowners so didn't have a house to sell. Yes, they included a nice letter, but really it comes down to dollars and cents. I do wish them well in their new home, we loved growing up there decades ago.

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celia
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Re: Personal letters to the sellers of your house can work!!!

Post by celia » Sat Nov 11, 2017 4:22 pm

DH's second parent died a few years ago and the trustee had to sell their house. It had been their "vacation house" in a beach community, but not on the beach. Before they retired to it full-time (30 years ago), they tore it down and re-built it. They maintained everything but hadn't updated the look, which made it harder to sell, at the asking price (over $1M). I think the trustee picked a horrid selling agent as he only had one open house, and buyer's agents had to take their clients over and open the lock box.

About 2 weeks before the listing has due to expire, 2 bids came in, at less than asking. The higher one had a lovely letter and the house would go from being lived in by an elderly couple to a family with school-age kids. The letter referenced the fact that the kids went to a Christian school nearby. Most of the heirs thought they were the better offer, but the trustee should try to get the price a little higher. However, one of the heirs was able to look up the dad's salary as he was a public employee. That heir insisted the house should be sold for the listed price since the dad was making more money than any of the heirs and the buyers could afford to pay tuition. So they must be rich!

The trustee used good judgement and compromised with the buyers on price.

We visited the house recently and the buyers let us look at the inside. They had opened up some walls and updated it very nicely and added another bathroom that the elderly couple had not wanted to build originally. They were in a lot of debt because of the remodeling loans, but they certainly had a lot nicer house than it had been.

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Re: Personal letters to the sellers of your house can work!!!

Post by Barefoot » Sat Nov 11, 2017 4:53 pm

I have 2 stories.

More than 20 years ago, we bought our current house in a VERY soft market. We found the house and wanted it, but the asking price was way high in our opinion. It had been on the market for 2 years. We offered what we thought the value was and included a letter explaining our basis for the offer. There were maybe 15 somewhat comparable sales in the previous 6 months, and we laid out our comparisons in a one page letter.

It took about 4 months of discussions, but the seller eventually accepted our original offer price.

This summer, after looking for a vacation place in a very hot market for over a year, we found a place that was exactly what we had been looking for.
They had a low listing price, and were setting up viewings in 1/2 hour intervals the Saturday we looked. They were going to consider offers at a set time that Tuesday. We went back at the end of the day Saturday to make sure our initial impressions were real, and had our agent write up a non contingent offer that was at the top of what we were willing to pay for the place. We heard there were 2 other offers, but ours was accepted. We closed all cash 3 weeks later, and couldn't be happier with the place.

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Ketawa
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Re: Personal letters to the sellers of your house can work!!!

Post by Ketawa » Sat Nov 11, 2017 7:49 pm

celia wrote:
Sat Nov 11, 2017 4:22 pm
I think the trustee picked a horrid selling agent as he only had one open house, and buyer's agents had to take their clients over and open the lock box.
This is getting off topic, but isn't this simply how sales work these days? There was another long thread discussing agents recently, and buyers simply don't want the listing agent there during the showing. Also, people don't really care about open houses anymore. I never went to an open house when I was buying my previous home, and the few times that the listing agent, and sometimes even the seller, were present during the showing I didn't like it. When I sold my home, I didn't do an open house, I had a lockbox, and my listing agent only came by to take pictures, check on the place when it was vacant, etc.

I think it's more telling that it sold below the asking price.

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