7 Tips for Writing the Perfect Real Estate Offer Letter
- Address the Seller By Name.
- Highlight What You Like Most About the Home.
- Share Something About Yourself.
- Throw in a Personal Picture.
- Discuss What You Have in Common.
- Keep it Short.
- Close the Letter Appropriately.
- 1 How do you write a strong real estate offer?
- 2 How do I write my own offer?
- 3 Can I write my own home offer?
- 4 How do you email a real estate offer?
- 5 How do you phrase an offer on a house?
- 6 What two things should you do before you make an offer?
- 7 What should I include in an offer?
- 8 How do I make an offer on a house as a realtor?
- 9 How much should I offer on a house in 2021?
- 10 Can you make an offer under asking price?
- 11 How low is too low for a House offer?
- 12 What is a real estate offer?
- 13 What do you write in a letter to a house seller?
- 14 What should I write in my first email to a realtor?
- 15 How to Write a Real Estate Purchase Offer that Gets Accepted
- 16 Give a Good Earnest Money Deposit
- 17 Offer the Right Price
- 18 Consider the Contingencies
- 19 Final Thoughts on Writing a Real Estate Purchase Offer
- 20 Free Real Estate Offer Letter Template
- 21 What Is A Real Estate Offer Letter?
- 22 What Should Be Included In A Real Estate Offer Letter?
- 23 How To Write A Real Estate Offer Letter
- 24 Free Real Estate Offer Letter Template
- 25 Price Negotiation
- 26 Summary
- 27 Here’s How to Avoid Offer Rejection in Any Real Estate Market
- 28 Use the Correct Form
- 29 Determine the Price
- 30 Make an Initial Deposit
- 31 Disclose your Down Payment
- 32 Name Your Financing Terms
- 33 Include Contingencies
- 34 Address Possession—in Detail
- 35 Spell Out Who Pays the Fees
- 36 Request Special Reports
- 37 Clearly State the Expiration of Your Offer
- 38 Check It and Check It Again
- 39 Additional Clauses
- 40 Writing a Real Estate Offer Letter: 9 Things to Include
- 40.1 What Is an Offer Letter in Real Estate?
- 40.2 Writing a Real Estate Offer Letter
- 40.3 The Bottom Line
- 41 How To Make An Offer On A House: 5 Steps
- 42 How To Write a Strong Real Estate Offer Letter
- 43 What Is an Offer Letter?
- 44 5 Must-Haves in a Real Estate Offer Letter
- 45 What To Avoid in a Home Offer Letter
- 46 Real Estate Offer Letter Template
- 47 The Bottom Line
- 48 How an Offer Letter Can Help a Home Seller Pick Your Bid
How do you write a strong real estate offer?
10 Ways To Get Your Offer Accepted In A Seller’s Market
- You’re finally ready to take the plunge and put in an offer on your dream house.
- Make Your Offer As Clean As Possible.
- Avoid Asking For Personal Property.
- Offer Above-Asking.
- Put Down A Stronger Earnest Money Deposit (EMD)
- Waive The Appraisal Contingency.
How do I write my own offer?
So, here are some of the most important things to include in a strong real estate offer letter:
- The Property Buyer and the Property Seller.
- Description of the Property.
- Purchase Price.
- Offer Expiration Date.
- Earnest Money Amount and Terms.
- Investigation Period.
- Contract Contingencies.
Can I write my own home offer?
You can write your own offer and submit it to the seller (if it’s for sale by owner) or to the seller’s agent. However, going it alone without the help of a savvy agent (especially if this is your first time buying a home) may not be the best idea.
How do you email a real estate offer?
Here’s a list of five things you should do in your home offer letter.
- Start with a formal greeting. Every real estate offer letter should begin formally.
- Share some details about yourself.
- Explain why you love the home.
- Include a few financial details.
- Close with a heartfelt thank-you.
How do you phrase an offer on a house?
Here are five top tips on writing a successful bid/offer letter for your dream property.
- Always put an offer in writing.
- Add ‘subject to contract’ to any offer in writing.
- Include as much detail as possible.
- Be as flexible as possible on timing.
- Use evidence to back up your price.
What two things should you do before you make an offer?
10 Things a First Time Home Buyer Should Do Before Making an
- Research the Area.
- Research the House.
- Do a Walkthrough.
- Check Utilities.
- Talk to the Neighbors.
- Get an Inspection.
- Give Yourself Options.
- Secure Financing.
What should I include in an offer?
What’s included in an offer letter
- Address: The home’s legal address, and sometimes the legal property description.
- Price: Details regarding the purchase price and terms.
- Earnest money: The amount and terms regarding the earnest money, including its disposition upon the acceptance of the offer.
How do I make an offer on a house as a realtor?
Tips for Making an Offer on a House With a Real Estate Agent
- Make sure your agent is a strong advocate.
- Understand the local housing market.
- Be clear about your budget and goals.
- Keep the contingencies in check.
- Ask about an escalation clause.
- Anticipate the seller’s response.
How much should I offer on a house in 2021?
Offers typically need to exceed at least 1 to 3 percent over list price when there are multiple competing buyers. For example, if a home is priced at $350,000, a winning offer might be as much as $3,500 to $10,500 above that.
Can you make an offer under asking price?
Offering slightly below asking price is pretty common — at least in a slow buyer’s market. If you’re the only person eyeing the property and the seller has had the home listed for a while, they’re probably flexible on price. They might be willing to accept less cash just to be done with it all.
How low is too low for a House offer?
As with all negotiations, when you are making an offer on a house, start low. A good rule of thumb though is to offer 5% to 10% lower than the asking price. Don’t forget that sellers often take this into account and deliberately put their house on the market for more than they expect or would accept.
What is a real estate offer?
When you decide to buy a property, your REALTOR® will prepare what is known as an Offer to Purchase. The standard form used for this is called the Contract of Purchase and Sale. Once accepted by the parties it becomes the contract between the buyer and seller.
What do you write in a letter to a house seller?
How to Write a Dear Home Seller Letter
- Introduce yourself. Start your cover letter with a friendly greeting and a little bit about who you are.
- Tell them what you like about the home. Be specific.
- Explain your offer.
- Be sincere.
- Don’t get too personal.
What should I write in my first email to a realtor?
Hello [Client], I hope you’re settling into your new house and that it’s starting to feel like home for you and [family member/pet names]. I wanted to say thanks for choosing me as your Realtor. It was a pleasure working with you, and I’m honored you allowed me to help you during this important process.
How to Write a Real Estate Purchase Offer that Gets Accepted
When you are dealing with purchasers as an agent, the process begins with the search for the ideal residence. When you locate it for your customer, they will be overjoyed and ready to submit an offer on a piece of real estate. This is where you, as an agent, come into play. The writing of the real estate buying offer is one of the most significant things you can do to help your situation. The acceptance of your offer is critical to the success of your client’s search for a new home – which means it must be carefully crafted!
As a result, you want to be certain that your offer is compelling and stands out from the competition.
The following are the three most important factors to examine and incorporate into your offer:
Give a Good Earnest Money Deposit
The Earnest Money Deposit is a fundamental component of every real estate acquisition agreement (E.M.D.) When purchasers make an offer, they must pay down a certain amount of money to protect their place in the offer and remove it from the market. This deposit is made to an escrow business that acts as a middleman. The larger the deposit, the more serious the buyer is about purchasing the property. Why? Increased interest in the home as shown by a higher E.M.D. shows that the buyer is serious about the property and is less likely to back out of the agreement.
What is a Good Earnest Money Deposit Amount?
In this section, we’ll discuss how much money a seller considers to be a reasonable Earnest Money Deposit amount. It is considered a very good earnest money deposit if the buyer puts down 3 percent of the purchase price. Allow me to provide you with an example to put this into perspective. Three bids are received by the seller, all for the same amount of $1,000,000, from three separate purchasers. What do you believe will be the most noticeable feature to the seller when he or she reviews the offers?
- EMDs are available in the following amounts: 3 percent – $30,000, offer1 EMD
- 2 percent – $20,000, offer2 EMD
- 1 percent – $10,000, offer3 EMD
The buyer’s offer of 2 percent is fine, but any less may be interpreted as a sign that the buyer is not serious about acquiring the property. That’s something that every merchant is concerned about. Because they are removing their home from the market in order to find a buyer, they will want to ensure that the transaction will go through smoothly. The fact that a seller is seeking a competitive bid is one factor that will make a difference. Particularly when the offer price is not a consideration.
Offer the Right Price
Every real estate buying offer is unique in its own right. However, it is critical to understand how much to contribute based on the circumstances. Every transaction involves a set of conditions that influence the final price.
Assuming it is a buyer’s market, there are plenty of listings to choose from.
Consequently, purchasers might offer a price that is equal to or slightly below the list price in this case. This is due to the fact that if their bid is not accepted, they will have more listing possibilities to pick from.
Inventory levels are low in a seller’s market. A small number of residences have piqued the curiosity of more purchasers. As a result, retailers are receiving several bids. Purchasers should make certain that their offer is competitively strong in this case, as they will be competing against other buyers. Regardless of the market, it is critical to begin your real estate acquisition offer at the list price if you want your offer to be taken into consideration.
Using the Days On Market (D.O.M) to Make a Powerful Real Estate Purchase Offer
Consider the following scenario: the house is valued at one million dollars. What would be a reasonable offer? It all depends on the market, the house, and the sellers, to be honest. You have a responsibility as a real estate agent to assist your purchasers in putting together the most competitive purchase offer that has the highest possibility of being approved. Finding out how many days a property has been on the market (D.O.M.) is one technique to estimate the optimum bid price. This is the number of days a residence has been advertised for sale on the Multiple Listing Service (MLS).
- It is common for sellers to get more motivated after their home has been on the market for a time and no offers have been received.
- Using the D.O.M.
- However, it is important to analyze why a house has been on the market for such a lengthy period of time.
- Consider contacting other real estate agents in the neighborhood who may have already been through the house with their customers to see if they have any comments or suggestions.
Consider the Contingencies
Another strategy to increase the likelihood of your offer being accepted is to include as few or no conditions as possible. Contingencies should be included only on items that are acceptable in nature. What is the definition of a contingency? A contingency is a slang term for “only if” or “if and only if.” For example, a “sale contingency” is a contingency that many purchasers would like to include in their contract. This means that they will only purchase the new house if and when their present home sells as well.
- The sellers have already begun the process of selling their home.
- When creating contingencies, you must be extremely cautious.
- However, you also want to provide proposals that are appealing and likely to be accepted.
- CONTINGENCY OF LOAN If you include a loan condition in your offer, it signifies that you will only purchase the property if you are able to obtain financing for it.
CONTINGENCY IN THE APPRAISAL You will only purchase this property if the appraiser determines that it is worth the amount you are offering. Most vendors will proceed with these limits because they are satisfied with the “only if” comments that are included in them.
Final Thoughts on Writing a Real Estate Purchase Offer
In your role as buyer’s agent, you’ll want to make sure that YOUR bid stands out from the competition. So make sure to include these essential elements in your offer to increase the likelihood of it being accepted. Once again, make certain to include a substantial earnest deposit of 3 percent, to offer at least the list price, and to have few to no conditions in your offer. Your well-written offer will communicate to the seller that your customer is serious about the purchase and is therefore less likely to back out of the transaction.
Free Real Estate Offer Letter Template
The Most Important Takeaways
- What is a real estate offer letter and how does it work? What information should be included
- What should be left out of the list
- What to include in an offer letter
- Template for a real estate offer letter
How can you make your offer stand out from the crowd when a seller receives many bids and offer letters? Making emotional appeals through the use of a real estate offer letter template may be done in a professional manner while not going overboard. Continue reading to find out how to write a winning real estate offer letter in the future. But don’t forget to grab the free real estate offer letter template at the conclusion of this article so that you can add it to your home-buying toolbox as well.
What Is A Real Estate Offer Letter?
A real estate offer letter is a written document that expresses a prospective buyer’s desire to purchase a house. A real estate offer letter, as the name implies, is a letter (either handwritten or typed) sent to a property owner informing them of a potential acquisition. A decent real estate offer letter will, among other things, present the owner with a firm offer to purchase the property. This should come as no surprise. Writing an offer letter is not as simple as informing the owner you want to purchase the property; you must be diplomatic in your approach to the matter.
What Should Be Included In A Real Estate Offer Letter?
Because a real estate offer letter is not an official legal document or contract, there is no formula to follow in terms of the components that must be included. Having said that, there are numerous components purchasers should include in their communications with sellers in order to be productive. Many people in the real estate industry have become accustomed to certain elements of an offer letter appearing on a regular basis over the years. An outline of the information that should be included in a real estate offer letter is provided in the following section:
- A listing of the possible property’s address and description
- The purchase price
- Terms and conditions for the sale as proposed
- The most ideal closure date
- The amount of the earnest money deposit
- Discussion of the deed and the title
- What adjustments will be made to utilities and taxes throughout the sale
- All of the stipulations and contingencies that are required for the selling
- Specific clauses should be included if necessary. The deadline by which the offer will be terminated
The items on the above list are by no means complete; they are only the “bones” of a normal offer letter. To understand how to incorporate the components listed above in a real estate offer letter, as well as suggestions for include personal aspects, continue reading this article.
What To Leave Out Of Your Letter
Some information should be left out totally, just as there are some bits of information that will be beneficial to your message. This is especially important since you don’t want to offend the seller, and you surely don’t want to step beyond of any legal restrictions established by the Fair Housing rules.
Before you begin composing your letter, review the following checklist to ensure that your appeal is as streamlined and effective as possible:
- Make sure you don’t give out too much personal information. A probable violation of the aforementioned Fair Housing regulations might result from including your race, gender, religion, or other information on a protected class on a housing application. If the seller were to take any of that information into consideration when selecting a buyer, he or she would be in violation of the law. Make sure to avoid include personal images, which are also included under this category. Leave out the specifics of the financial situation. While you want to include the sale price and deposit amount in the offer letter, you don’t want to go into too much detail about your financial status. Incorporating more financial information may be detrimental to your case while bargaining throughout the closing process. Make sure you just include the numbers that are required and leave away anything that can lead the seller to be concerned about your financing
- Concentrate on the positive. Avoid including any plans you have for their home that may differ from what they have completed themselves. Talking about your plans to pull down a few walls and rebuild the basement may be construed as a disrespect to their property. Instead, emphasize the aspects of the property that you currently enjoy
- Do not go against the terms of the purchase agreement. Anything that will be decided in the final purchase agreement should be avoided at all costs. Keep in mind that the purpose of an offer letter is to distinguish yourself from the competition during the home-buying process
- The difficult talks will take place after that. Over and above anything else, avoid contradicting yourself or your agent, since this might lead to confusion for everyone concerned. Try not to come out as desperate. While it is admirable to demonstrate your genuine interest in purchasing the property in question, it is important not to come off as desperate. As a result, the seller may believe you are willing to pay a greater price for the house, and they may increase their asking price to reflect this.
How To Write A Real Estate Offer Letter
The most difficult component of creating a real estate offer letter will be remembering to include all of the relevant information while being concise. A solid offer letter should be no more than one page long, or around 1000 words. This is something to keep in mind as you go through the next steps:
- Make your case for the property and explain why you want it. Personalize your message and establish a connection with the seller. Provide the appropriate financial details to back up your offer. Explain any contingencies you may have in a courteous manner.
1. Make Your Case
In certain cases, a seller will just be searching for an offer that will allow for a seamless transaction to occur. In other circumstances, though, a seller may have an emotional relationship to their property and wish for it to be sold to the “perfect” bidder for their needs. The process of buying and selling a property can be a very emotional one, and creating a sincere offer letter may assist to personalize the entire transaction process. Make an effort to present your point, but keep your personal details to a minimum.
- Include personal information while keeping the letter short and to the point, if possible.
- In other circumstances, sellers may choose purchasers who make a little lesser offer than their asking price because they want to ensure that the property is in excellent hands.
- This section of the letter should demonstrate how serious you are in purchasing the property in question.
- Make an effort to be likeable and authentic while avoiding disclosing too much information.
2. Build A Relationship With The Seller
There are various tactics that may be used to help your offer letter stand out from the crowd, all of which are dependent on your ability to establish a rapport with the seller. When composing your offer letter, look for particular methods to relate to the seller’s emotions—and to relieve them of a difficulty they may be experiencing. For prospective purchasers, you might be able to explain why this particular house is ideal for you and your family. For investors, make an argument about how you can meet the seller’s demands in some way, for as by offering to pay for moving or cleaning services.
ISoldMyHouse owner Kris Lippi shares the following insight: “An eye-catching offer letter includes praises regarding the property.” People like it when they are recognized for the effort they have made into the home they are about to hand over to you.
The goal is to make your letter stand out not because of its drama, but because of its genuineness.
Some suggestions include handwriting the letter and envelope addresses, attaching a photo of your family or pets, or even inserting a sketch created by your youngster as part of the correspondence. This is your opportunity to make an excellent first impression on the seller.
3. Support Your Offer
The specifics of your offer are, in essence, the meat and potatoes of your correspondence. This is where you will lay out the information and, ideally, demonstrate that you have met the requirements of the listing. Include information on the status of your loan (if you have been authorized) as well as the size of your down payment. Keep in mind that you should avoid overstating your financial situation and instead stick to your offer throughout the letter. Any financial information provided should be straightforward and precise, since misrepresenting oneself during talks may result in difficulties.
4. Explain Your Contingencies
At the conclusion of your letter, you should fulfill two major goals. First and foremost, it should detail any contingencies you may have regarding the property. Obtaining a house inspection or appraisal, for example, may fall under this category. Don’t be concerned about “ruining” your chances of getting the property because these themes will almost certainly come up again throughout the negotiating process. It is far more vital to be open and honest about your goals and expectations. Finally, the conclusion should restate why you are the most qualified candidate for the property in question.
Then, in a sentence or two, describe why they are important to you and how you intend to incorporate them into your plans for the property.
Free Real Estate Offer Letter Template
The offer letter template may be downloaded by clicking on the picture below. This template has a professional structure and can assist you in brainstorming talking topics for when you write your own stand-out offer letter:
Many purchasers may feel compelled to act immediately after discovering the ideal house. They want to prevent missing out on the opportunity. However, purchasers in even the most competitive markets should not be discouraged from negotiating a sale because of the speed with which a real estate transaction is completed. Buyers should instead ensure that the sale price is reasonable and then alter their offer accordingly to account for this. To guarantee that you are receiving a fair price for your house, investigate the market worth of the property and seek comments from your real estate agent.
This gives them the ability to bargain if the appraisal or inspection discovers information that was previously unknown to anybody engaged in the purchase.
These include properties that have been on the market for an extended period of time, estate sales, and other similar situations, as well as properties where the market is moving slowly in that particular location.
All of the information available to homebuyers may be used to their advantage in order to negotiate a reasonable sale price and achieve a fair bargain on their new house.
Strong offer letters may make the difference between acquiring a fantastic home and walking away with nothing. That is why it is critical to establish a strong relationship with the seller and to offer them with peace of mind during the transaction. Always strike a balance between your personal and professional lives, and above all, show that you are genuinely interested in the property you are considering. Don’t forget: whether you’re an experienced real estate investor or a first-time property buyer, our real estate offer letter form might be of assistance.
Contact us today.
Our new online real estate program, taught by professional investor Than Merrill, will teach you the fundamentals of real estate investment and provide you with the tools you need to get started.
Sign up for our FREE 1-Day Real Estate Webinar and get started learning how to create a profitable investing business right away.
Here’s How to Avoid Offer Rejection in Any Real Estate Market
Buyers might become so enthralled with the process of locating the right property that they can lose sight of the important task of putting together a buying offer. Almost as crucial as the amount of money you’re prepared to spend for the property is the quality and substance of the offer you submit. Purchasers’ chances of having their offers accepted are reduced when their offers are worded poorly. Additionally, certain regulations and restrictions may apply, so it’s vital to conduct thorough study and complete the process correctly.
Use the Correct Form
courtesy of Courtneyk / Getty Images Making certain that you’re using the correct form may seem obvious, but these papers aren’t created in a way that is universally applicable. There are many various types of purchase contracts available, and each state has its own set of rules and regulations governing them. Depending on what you want to buy, you could require a manufactured home purchase agreement or one that is built for a new construction residential purchase agreement, among other things.
Your state may have a distinct agreement form for unoccupied land or for properties that are in the process of being sold through a probate process.
Determine the Price
Witthaya Prasongsin is a photographer for Getty Images. You should avoid include phrases like “I will pay $1,000 more than your best offer” in your bids since there may be legal ramifications if the offer is accepted. That, as well as any other proposal meant to outbid the competition, is regarded as an escalation provision in the contract. You have an idea of what you want to charge, and you must put it in writing. Unless you’re dealing with an extreme buyer’s market or a hot seller’s market, you’ll generally want to offer a little less than you plan to spend.
That is all up to you. You will need a few data regarding the loan in order to calculate a mortgage for the house you have in mind. Afterwards, you can either do the computations by hand or run the data via the mortgage calculator provided below.
Make an Initial Deposit
courtesy of Skaman306 / Getty Images In order to generate a legally binding purchase offer, most jurisdictions require that you provide an earnest money or good faith deposit. It might be a personal check or a certified check, depending on the situation. It might also be in the form of cash, personal property, or an unsecured promissory note, for example. Overall, it must be something with a clearly defined and determinable worth, as stated above. Make it clear who will be in charge of holding the deposit—it may be nearly anyone other than the vendor!
However, keep in mind that the seller may be able to keep your deposit if you decide that you don’t want the property after all and you fail to comply with the contract’s conditions by failing to complete the transaction.
Disclose your Down Payment
Featured image courtesy of Jamie Carroll/Getty Images Furthermore, you’ll need to disclose to the seller how you intend to pay for your down payment on the property, including whether you’ll use cash, a promissory note, stocks, real estate, or other assets to make the payment. Buyers often pay their down payments using cash that is immediately available to them. Some states demand that your down payment be verified within a specific time frame. If you’re selling an asset to generate cash, such as by liquidating a mutual fund to raise cash, it might be regarded a contingency of the transaction to include it.
If you are unable to complete the transaction within a reasonable timeframe, your offer becomes invalid and non-binding.
Name Your Financing Terms
courtesy of Skynesher / Getty Images It is important that the total consideration you pay for the property includes your deposit, your down payment, and any financing you use to purchase it. You may also be able to select a maximum interest rate in some contracts, which is another contingency that gives you with a mechanism to terminate the arrangement if your interest rate increases after you apply for a mortgage. Specify the type of financing you wish to obtain: conventional, FHA, VA, contract of sale, or assumption of a mortgage loan.
a large stock photograph Most states require purchasers to have the property examined within a specific number of days of signing the purchase contract. Unless this privilege is explicitly waived in writing, federal law provides all buyers 10 days to examine for lead paint before making a purchase. Many contracts also include provisions for other eventualities, such as an acceptable appraisal and loan funding, which are common in the construction industry.
If you don’t eliminate these conditions in writing, they may continue to be in force until the transaction is completed, depending on your state’s laws and regulations. It’s critical that you incorporate any and all of them in your purchase contract as a matter of course.
Address Possession—in Detail
Photograph by David Sacks / Getty Images More disputes for custody of property are fought than you may think, according to statistics. Some transactions fail because the sellers and purchasers have unrealistic expectations about when the buyer would be able to move into the property. It’s critical to know precisely when you may expect to be able to move in, so make sure to include the possession date in your purchase contract. It might be on the day of closure or the day following closing, but make sure it’s included in the schedule.
If the seller will continue residing in the property after you have purchased it, even for a short length of time, you will be entitled to some form of compensation or modification.
Spell Out Who Pays the Fees
Photograph courtesy of Virojt Changyencham / Getty Images The majority of contracts allow for the negotiation of fees, while others are traditionally paid by one side or the other. It might vary depending on where you live. If you are unfamiliar with the customs of the area, you may accidentally attract a counteroffer. Before submitting an offer, speak with the listing agent to learn about the market conditions in your region. It is possible that costs for title, escrow, and county or local transfer taxes will total 2 to 5 percent of the sales price in some situations.
Request Special Reports
a large stock photograph If you are worried about a specific inspection, you should request a report. Few things frustrate sellers more than discovering halfway through a transaction that a buyer had an issue that wasn’t addressed up front and that the seller didn’t anticipate. Sellers believe they have been tricked, and purchasers believe they have been mislead. Incorporate all of the concerns you want investigated, such as mold or a leaky roof, into one document. A common practice among purchasers is to complete all inspections before submitting an offer in order to avoid this type of misunderstanding.
Clearly State the Expiration of Your Offer
Photograph by Gary Burchell/Taxi/Getty Images Deals sometimes fall through because buyers don’t provide enough time for sellers to reply to their bids; thus, contact the listing agent and inquire about the amount of time that is really necessary to complete the transaction. It’s possible that there are concerns you’re not aware of, such as the fact that the sellers are out of town or coping with a crisis. You may include a fair deadline in a consideration clause, but it’s a good idea to familiarize yourself with the contract regulations in your state addressing offer expiry before drafting one.
If the seller does not react by this date, you can consider the offer void.
Make it clear to whom an accepted offer should be conveyed when it has been accepted. Alternatively, if another offer appears out of nowhere and you are the specified recipient and you are not accessible to take delivery, you risk losing the transaction altogether.
Check It and Check It Again
We are all turned off by sloppiness, and you want your offer to be accepted regardless of how it looks. Verify that it is free of typos, spelling, and grammar errors. Better still, enlist the assistance of a friend or family member. It’s never a bad thing to have a second set of eyes. While you’re at it, go through the provisions you’ve provided to make sure everything is correct. Consider whether or not you are truly comfortable with all of them. If the seller accepts your offer, it will become a legally binding contract, so be sure you are comfortable with all of the terms and conditions in your offer.
Some offers can and do include extra provisions that are required by state law, and this is something that is common practice. Some jurisdictions, for example, may demand that you give a legal description of the property in the same format as it appears on the original title document. Include descriptions of any “extras,” such as fixtures or appliances, that you’d like to include in the sale, as well as any other pertinent information. If you feel like you might be a little bit in over your head, you should have a real estate attorney examine your offer before submitting it to the seller.
Writing a Real Estate Offer Letter: 9 Things to Include
Purchasing an investment property generally entails more work than the majority of people anticipate. The real estate offer letter is an important item that is sometimes missed. Making an offer on a property, on the other hand, is absolutely necessary. Writing a great offer letter is, in fact, one of the most effective methods for a home buyer to distinguish himself or herself from other house buyers.
What Is an Offer Letter in Real Estate?
The first step in submitting an offer to acquire real estate is to draft an offer letter in which you indicate your interest in purchasing the property and include all other relevant data surrounding your proposed acquisition. In other words, you are informing the seller of your intentions to acquire a certain property and the terms under which you want to do so before you commit to the purchase and begin making payments. If the property seller accepts your offer, you will be able to take possession of the property as soon as you have completed the final preparations.
The seller has the option of responding with a counteroffer or different terms without having to rewrite lengthy legal documents.
An offer letter for a house, on the other hand, is not a legally binding contract.
Despite the fact that a letter of offer is an important fundamental document, some property purchasers who desire a quick transaction may choose to skip it. The Beginner’s Guide to Purchasing an Investment Property is also recommended.
Writing a Real Estate Offer Letter
Bidding wars are significantly more likely in a seller’s market than in a buyer’s market. In this case, a large number of interested purchasers may submit real estate offer letters to the same seller. Because of the high level of competition, it is critical that you understand how to create an effective real estate offer letter. First and foremost, it is critical to verify that all of the necessary components are present. If you are proposing a bargain on the Multiple Listing Service, your real estate agent will most likely assist you in writing the letter.
Consequently, here are some of the most critical elements to include in a compelling real estate offer letter:
1. The Property Buyer and the Property Seller
The fundamental components of a real estate offer letter are quite similar to those of a real estate contract in most cases. The names and current addresses of both the seller and the buyer are the most significant pieces of information. Making certain that all of this information is accurate is critical in order to avoid any potential delays or difficulties that may arise as a consequence of faulty information being provided throughout the purchasing process.
2. Description of the Property
In the original title, the legal description of the property should be included. It may contain information such as the address, lot and block numbers, physical boundaries, and numerical measures.
3. Purchase Price
The purchase price is one of the most significant aspects of a real estate offer letter, and it is also one of the most difficult to calculate. The property seller often offers their home at a specific price. However, in the majority of circumstances, the buyer does not pay this amount. You have the option of making an offer that is less than or greater than the seller’s asking price, based on a variety of criteria, such as the condition of the property. If there are any extra stipulations pertaining to the purchase price, these should be provided as well, especially if a portion of the purchase price will be financed.
Specifically, it entails investigating the prices at which comparable houses in the same location have previously sold.
You may use the investment property calculator on Mashvisor to quickly and simply obtain real estate comparisons for homes that are currently listed on the marketplace.
It will be necessary for property sellers to know what type of financing you will be using to acquire the property. Typically, sellers want this information to ensure that you genuinely have the funds that you are selling. You’ll be taking out a traditional loan from a financial institution, right? Is it possible to purchase it with cash? Are you planning to take out a hard money loan? In this case, it is because the seller does not wish to accept an offer and tie up the property for weeks only to have the buyer back out later because they are unable to purchase the house.
When applying for a loan, you may demonstrate your lender that you have previously been accepted by providing a pre-approval letter from your lender. In this way, you demonstrate to the seller that you are a serious buyer. Related: The Most Effective Approach to Financing Investment Property in 2019
5. Offer Expiration Date
When purchasing an investment property, you will most likely be looking at a number of different homes that are currently on the market. When you make an offer on a home, it is rare that you will make an offer on another property at the same time. As a result, the property seller is required to respond to you as quickly as reasonably practicable. It is critical to include in your real estate offer letter a specific timeframe by which the property seller must decide whether or not to accept or reject your proposal.
6. Earnest Money Amount and Terms
This is a sign that the buyer is serious about purchasing the property in question. On the offer, you should clearly state the amount of earnest money that will be required, which is normally 1 percent of the entire offer price. If the transaction is successfully completed, the earnest money deposit will be returned to the buyer at the time of closure. If the transaction fails, the earnest money deposit may or may not be refunded, depending on the state legislation in effect.
7. Investigation Period
A real estate offer letter should include the time frame within which the buyer would be required to conduct feasibility and due diligence studies on the property being offered for sale. The seller of the property is expected to collaborate as far as practically possible with the buyer’s due diligence and feasibility assessments. The buyer conducts an official search on the property in order to determine who is the legal owner of the property. Before the seller has been confirmed as the registered owner of the property under consideration, the deposit on the property should not be paid.
8. Contract Contingencies
In addition, any contract conditions should be clearly stated in your offer letter. This condition provides you with the ability to withdraw from the offer in certain situations without incurring any penalty. Consider the following scenarios: if your financing falls through, if you discover something wrong with the house after an inspection, if you are unable to obtain homeowner’s insurance, if there are title concerns, and so forth.
9. Closing Date
A real estate offer letter should also include a target closing date, which should be included in the document. This clause specifies when a real estate transaction should be completed and when it should not.
The Bottom Line
A real estate offer letter expresses your desire to acquire property and specifies the terms and circumstances of the transaction. It does not, by itself, guarantee that you will be able to purchase the property in which you have shown an interest. Occasionally, it might be difficult to compete with other purchasers, particularly those who are ready to pay more money in cash up front. When written properly, an offer letter might encourage a property seller to consider selling to you instead of another buyer.
A Final Tip:
Due to the fact that most homeowners have undoubtedly lived in their houses for a number of years, selling a home may be an emotionally draining process. This is something to bear in mind while putting up a real estate offer. In addition to adding the previously mentioned vital features, you need also demonstrate to them why you are a good choice if you want to stand out from the crowd.
Attempt to establish a personal connection with the property seller, and make the offer concise and succinct in its language. Make sure you work with an experienced real estate agent while preparing an offer letter in order to prevent making costly blunders.
Alex is a successful entrepreneur and a skilled content writer who specializes in personal financial, business, and investing topics. He has been contributing to a variety of venues, both online and in print, for more than six years. Besides writing and working, Alex likes reading, traveling, and spending time in the great outdoors.
How To Make An Offer On A House: 5 Steps
When a seller receives your offer, he or she can choose between three options: accept it, counteroffer, or reject it.
The Seller Accepts Your Offer
Is your offer still on the table with the seller? If you answered yes, congrats! You are now free to proceed with the production of the earnest money check and the signing of the sales agreement. You’re now ready to go forward with your mortgage lender and begin making appointments for the home inspection and appraisal inspections.
The Seller Makes A Counteroffer
Whether you accept or reject the seller’s counteroffer depends entirely on your own preferences. It is possible for your real estate agent to call the seller or their agent in order to get a sense of what the seller is hoping to receive for their house and whether or not they are prepared to bargain with you on price and terms. Despite the fact that these talks are rather informal in nature and are frequently merely chats between the parties and their representatives, they will ultimately serve as the basis for the purchase contract.
- You may be willing to accept a reduced purchase price in exchange for concessions or repair requests.
- Find out what the vendors’ problems are and try to solve them.
- Alternatively, would they like to push closing out as far as possible while they search for their next home?
- Create a letter of intent to purchase a home.
- A passionate letter from you to the seller, in which you explain your desire to purchase their house, should be included in the package.
The Seller Rejects Your Offer
There are times when things simply aren’t meant to be. It’s possible that you undervalued your offer, or that the seller isn’t ready to sell. Although a rejection may leave you feeling upset, keep in mind that the house you love today may look like an albatross 5 years from now if you are unable to pay it comfortably in the meantime.
Consider the experience a learning opportunity, and then get back to work on your house shopping. It’s possible that your ultimate ideal home is just around the corner.
How To Write a Strong Real Estate Offer Letter
After weeks of searching through real estate listings on the internet, you may come upon your ideal house. There may be other potential buyers who are ready to make offers, and they may be willing to pay a higher price than you can afford. What can you do to improve your chances of winning? And it’s at this point that your real estate offer letter comes in. A well-written letter may move the seller’s emotions and distinguish you from other purchasers in the process. It is possible that this is the reason why the owner accepts your offer.
- What Is an Offer Letter
- 5 Must-Haves in a Real Estate Offer Letter
- What Is a Purchase Agreement
- What Should Not Be Included in a Home Offer Letter
- Real Estate Offer Letter Template
- The Takeaway
What Is an Offer Letter?
A real estate offer letter is your opportunity to establish a relationship with the seller. It’s an opportunity to identify yourself, explain why you’re interested in purchasing the house, and clarify any financial arrangements. Remember: For many homeowners, selling a home is more than just a financial transaction. It is also an emotional experience. Their years spent there may have resulted in lasting memories for them, and they may be reluctant to hand up the keys to just anybody. “When many offers are made to a homeowner, it is important to make a strong first impression,” says Melissa Samar, a real estate broker and owner of Picket Fence Realty in Tavares, Florida.
5 Must-Haves in a Real Estate Offer Letter
Don’t feel that you have to wing it when it comes to your real estate offer letter; it is really crucial. “Your Realtor can assist you in learning more about the seller so that you can customize your letter,” Samar explains. Personalization is essential, but there is more to a successful letter than that. Listed below is a list of five items that you should include in your house offer letter.
1. Start with a formal greeting
Every real estate offer letter should be official at its beginning. Keep your welcome short and to the point, and declare your goal clearly. “It’s important to make a good first impression,” Samar explains. Despite the fact that it may seem apparent, you should always address the vendor by his or her first and last name. Dear Barbara and John” or “Dear Mr. and Mrs. Lee” are more personal than “Dear Seller,” which is a generic greeting.
This is your opportunity to introduce yourself (and your family, if applicable). Take advantage of the chance to demonstrate to the seller that the persons making the offer to purchase their house are genuine. Samar believes that some sellers may be more concerned with who is purchasing their property than with how much they are willing to pay for it. Be sure to specify if you’re employed as a public servant, such as a schoolteacher or a member of the local police enforcement force, in the same vein.
You should also state whether or not you are currently serving in the military or if you are a veteran. “It gives sellers great satisfaction to know that they assisted a hero in purchasing a property,” Samar explains.
3. Explain why you love the home
Following that, you should describe what you enjoy about the house and why it is a good fit for you and your family. You may, for example, highlight the spacious kitchen, cozy reading nook, or stunning landscaping surrounding the rear patio in your presentation. Samar advises including specifics about how you want to personalize the space — such as future dinner party plans or family movie evenings — in your proposal. There is one exception to this rule, though. Avoid expressing your plans to extensively alter or demolish portions of the property (we’ll go over this in more detail later).
4. Include a few financial details
The offer letter provides you with a chance to demonstrate to the seller that you anticipate to be authorized and that you want to keep the closure on time. Your mortgage preapproval letter — which verifies that you are likely to qualify for a mortgage — may be highlighted, and you may wish to clarify any aspects about your offer if they are not clear. Furthermore, you may mention your earnest money deposit, since it demonstrates your degree of commitment to purchasing their property. Earnest money is the amount of money you put down up front that will be used to your closing expenses and down payment later on.
View the full article:How To Save For A Down Payment On A Home This section of the real estate offer letter may be more difficult to navigate than the others, so don’t be hesitant to get assistance from your real estate agent if you have any questions.
5. Close with a heartfelt thank-you
The last paragraph of your real estate offer letter is your opportunity to leave a lasting impression on the reader. You should express your appreciation to the seller for their time and thoughtfulness, and reiterate your interest in purchasing the property. In order to communicate your sincerity, Samar advises concluding with something like “I would be extremely glad if you choose my offer” or something like. Return to the top of the page
What To Avoid in a Home Offer Letter
While there are some items that must be included in an offer letter when purchasing a home, there are also some things that should be avoided. These include:
- Negativity: As a general guideline, it’s important to maintain a positive attitude, especially when describing the property or the seller’s interior design choices. The carpeting or the outdated bathroom may be something you despise, but you should refrain from mentioning it (or any other unfavorable element of the property) in your letter. Changes that have been proposed: As previously said, do not discuss your renovation plans with others. Planning to make your house your own is perfectly acceptable, but some people may be upset if you tell them that the entire area has to be updated. According to Samar, “Older generations take pride in their homes and believe they are ideal just the way they are.” Politics: While you may like seeing your favorite campaign sign in the window of your next-door neighbor, Samar advises that you avoid using political references in your offer letter. A dangerous action, even if the vendor shares your political beliefs, might result in failure. Desperation: While it’s a good idea to include your mortgage preapproval, down payment, and earnest money deposit in your offer, you don’t want to give the appearance that you’re eager to spend even more in order to obtain the property. It is possible that the seller will attempt to counter your offer with a greater price
When drafting your real estate offer letter, remember to consult with your real estate agent to ensure that your letter is as professional as possible. They should be able to assist you in avoiding red flags as well as navigating any complicated financial situations. Check out our First-Time Homebuyer Guide for more information. Return to the top of the page
Real Estate Offer Letter Template
If you’re still having trouble figuring out how to write an offer letter for a house, here’s a sample you may use as a guideline. It incorporates all five of the must-haves listed above, as well as some personal touches. Dear, Thank you for providing me with the chance to submit an offer on your lovely house. Our hearts were captured by your inviting front porch, huge eat-in kitchen, and magnificent rose garden that surrounds the rear patio. We couldn’t stop talking about it. We adore gardening and cooking, and we try to spend as much time as we can outside in the fresh air.
Furthermore, your home is near to my place of employment, where I teach eighth grade math and coach youth soccer on Saturdays.
In addition, we are glad to provide a $15,000 earnest money deposit as a 5 percent down payment.
Also, if it becomes necessary, we are willing to be flexible with the closing date.
Thank you once again for taking the time to read this and for your consideration! Sincerely, You are not have to follow the template exactly, but you should make sure to include the following critical aspects to ensure that you cover all of your bases:
- Your first and last name
- If you have a co-buyer, please include their name. Your mailing address
- The name of the vendor
- The location of the vendor
- Your letter of preapproval for a mortgage
- Your first down payment
- Your down payment on the house
- Your ability to shut earlier than expected
Return to the top of the page
The Bottom Line
It is possible that a powerful real estate offer letter will provide more than just an advantage over the competition; it may also help to close the purchase and improve the process from beginning to end. Samar points out that when buyers identify themselves with an offer letter, the entire homebuying process is made easier. Even if you are not in a competitive situation with other possible buyers, she believes that sellers will enjoy getting a house offer letter from you. Being authentic is the most effective method to make a positive impression.
How an Offer Letter Can Help a Home Seller Pick Your Bid
The importance of first impressions cannot be overstated. A great first impression, whether you’re purchasing a home, an apartment, or any other form of property, can prepare the way for a fruitful negotiating process and an easy transaction overall. Formal offers are often delivered in writing by the buyer’s broker to the seller’s broker through email, unless otherwise specified. Sometimes a customer may include a personal letter to the seller with their purchase, which they will mail along with it.
Alternatively, if the buyer is not dealing with a real estate broker and is not represented, the offer would come straight from the buyer.
Keep it basic, and concentrate on three main points: Clearly state your goals, demonstrate that you have the financial resources to complete the acquisition, and personally appeal to the seller.
- Let’s start with the specifics
- Paint a picture
- Court the seller’s affections
- Don’t go overboard: go the additional mile
- Exceed the recommended length Letters of example
Start With the Details
Express your gratitude for having the chance to view the home at the outset of your offer letter, and be clear about the conditions of your offer. Following that, add information about how you want to pay for the purchase (all cash or financing), your requests for contingencies (for example, a finance contingency and an inspection contingency), your preferred closing date, and any other specific circumstances that apply to the transaction. To demonstrate your ability to finance the acquisition, you should include a copy of your preapproval letter from your financial institution with the offer letter.
You should also consult with a real estate attorney to assist you with the deal.
Consider contextualizing current market circumstances and previous sales of comparable homes in the same area or building to help put things into perspective and strengthen your argument.
If the property is older or in need of repairs and renovations, stating the particular improvements that need to be made as well as the estimated expenses of the renovations can also assist to explain your offer in these circumstances.
Paint a Picture
To develop an effective bargaining stance, it is critical to present oneself as a human being rather than a basic money figure. Provide the sellers with a brief overview of your personal history, as well as information on your spouse and family, if appropriate. Include information about your professional background, such as your present position and a description of your professional field, as well as a brief narrative of your career path that led you to your current role. Also included may be the location of your childhood home and the names of the schools you’ve attended.
Now you’re a person with a narrative to tell — you’ve created an image of yourself that makes it more difficult for a seller to dismiss you.
Romance the Seller
Following a brief introduction of yourself, transfer your attention to romancing the seller when you arrive at his or her residence. Make the seller feel good about themselves by highlighting all of the qualities you like about the property or apartment and explaining why it is the place you wish to call home. Be excited, but don’t go crazy with your enthusiasm. However, even though a real estate negotiation is a commercial transaction, if the sellers identify with you on a human level, they may develop an affinity toward you – particularly in a competitive bidding environment – which may mean that they are more willing to negotiate on your behalf.
It has happened in the past where a buyer put an offer on an apartment, which resulted in a bidding war for that flat.
So, what was the difference between the two cases?
Sometimes it’s the smallest of details, such as this, that helps to seal the sale.
Don’t Overdo It: Recommended Length
Keep the letter concise and to the point. It’s critical to provide only the necessary information and flatter the seller just enough without going overboard, as the latter might have the opposite impact and turn off a seller entirely. When it comes to suggested length, anything between one and three paragraphs is great, but do not exceed one page of written text in total (font size 11-12).
Go the Extra Mile
During a bidding war, purchasers might express their appreciation to the seller by sending flowers or cookies, along with a handwritten letter. A modest gesture such as this demonstrates your thoughtfulness as well as your genuine affection for the property. Just be sure to keep it basic and classy, since you never want a seller to feel uncomfortable because you were too forceful in your sales pitch. Last but not least, you want to make certain that your offer letter clearly states your intent to purchase a home, that you are in a sound financial position to make the purchase, and that you’re providing a personal appeal to the sellers so that they know their home will be in caring and responsible hands after you’ve made the purchase.
Greetings, Seller Thank you for granting me permission to pay you a visit. I adore it, and I can’t wait to make it my permanent residence. I’m delighted to propose my proposal for. As soon as all of the due diligence and closing procedures are completed, I am ready to sign the contract. I’d want to introduce myself to you a little bit. My first impression of your home was that it was a place I could see myself living for many years to come from the time I stepped inside it. I intend to do so.
Example Two: Informal
Here is an example of a casual letter that a buyer recently addressed to a seller. Greetings, Seller We’re doing it. We have lived in New York City our entire lives and raised our children here. We met while we were in college at University and have been together for 40 years. We relocated to Los Angeles approximately X years ago when we became a partner at the company. We have chosen to retire after 30 years atfirm in order to concentrate on the next stage of life. Because pursuing possibilities in New York City is a significant component of the next stage.
We’ve been renting in the area for the past two years and love it.
Our first impression of the apartment was that it was a location where we could enjoy this next era of our life while still having enough space for our children and friends from the West Coast to visit.
We appreciate the open layout of the apartment’s living rooms as well as the building’s facilities, which include private wine lockers (which we will put to excellent use with our collection of California wines!).
We look forward to hearing from you in response to our offer with good news.