Whether you’re in a buyer’s market or a seller’s market, attaching a well-written cover letter to your offer to purchase real estate will ensure that your offer gets read—and remembered. Cover letters are important because they help you stand out from the crowd. Using one allows you to open a dialogue with the seller and encourages one-on-one communication, which can often lead to you getting your deal done.
1) Getting started
Many times when you’re presenting offers, they will travel between you or your real estate agent and the seller’s real estate agent. Even if you are dealing directly with the seller, it pays to clearly convey your thoughts and proposal on paper. You’ll find that this ice breaker will help give you the edge. Your letter should be short and to the point. If your handwriting is neat, then you can handwrite your letter; otherwise, type it. Your letter will introduce you, your offer and why the seller should accept it. Your cover letter should be about four paragraphs long and accompany your formal offer(s) to purchase.
2) The introduction
In the first paragraph, right after the greeting, explain who you are, your purpose and why you are contacting the seller. If you have been introduced through someone, or if your real estate agent has already walked through the property, say so here. Example:
Dear Mr. Smith,
My name is John Doe and it was a pleasure viewing your property today with my real estate agent, Ms. Jones. I’d like to write an offer to purchase. I was impressed with the quality of your home, and I especially liked the renovations you did in the living room. I have been managing rental properties in the area for the past 10 years and I think your property would make an excellent home for new families arriving to our city."
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3) Communicate the benefits
The second paragraph should hit on exactly what you can do for the seller. State your qualifications: If the seller needs a quick closing date or a long, flexible one, offer it here. Assure the seller that you have experience in real estate, that you have your financing arranged and that you are able to provide an offer with minimal conditions. Of course, only offer what you can truly deliver. You also want to address whatever concerns the seller may be experiencing and offer solutions.
4) Demonstrate your knowledge
In paragraph three, show the seller that you’ve done your homework. List any facts about the house that pertain to your offer, neighboring sold prices and defects or attributes you have noticed. For example:
Dear Mr. Seller,
As you may know, the lot your house is on is 25 square feet smaller than similar listings and doesn’t have an attached garage. Comparable prices are in the $200,000 range.
Using bullets works well here.
5) Make your pitch
You’ll summarize your letter’s message and present your offer to purchase real estate in paragraph four:
I’m certain you’ll be pleased with my offer of the full asking price of $210,000." Always give an A or B choice. For example: Offer A is at full list price with the seller delaying possession for ix months. Offer B states that you will close in two weeks for $35,000 less than list price. The purpose of offering A or B choices is that the seller will more likely be compelled to negotiate on one of your two offers rather than neither.
Tips: Cover letters are a good strategy to use when you’ve done your homework and want to get noticed from a stack of offers. Always treat the seller with respect and make sure your A or B choices are worthwhile. Alter the details in the letter to suit your current market and property rather than sticking to a form letter. Include your direct phone number and encourage the seller to call or meet with you. Sometimes investors can be a turn-off to sellers, so think about your seller and write your offer accordingly.
6) Set a deadline
Lastly, be sure to include an action deadline. It may be a gentle nudge to politely ask the seller to call you first, ahead of the other offers they received, or it may be something with a little more urgency, such as: "I’m going to be buying one house this week and I’d like it to be yours. Please get back to me before 1:00 PM on Wednesday or I will go ahead with one of my other offers."