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Love Letters Re-examined

05/3/21  |  Liz Lyster

We are all well aware by now that real estate in Greater Boston is hot hot hot. Any house or condo can inspire an all-out bidding war, with some prospective buyers waiving every contingency or offering to buy with cash. We’ve written about the benefits and costs of waiving contingencies, as well as how to compete against an all-cash offer; now we’d like to share our thoughts on the pros and cons of another tool: the “love letter.” Our final thoughts, however, lead us to advise sellers against accepting these letters, though it's a bit tricker for our buyers.

What is a real estate love letter? Simply put, a love letter is a way to introduce yourself to the seller. Some buyers talk about how they would use the home, others compliment specific features of the home and neighborhood. This letter attempts to strike an emotional chord with the seller, which may nudge them to choose your offer over others.

In a seller's market, a love letter may help you stand out from the crowd. If a personal touch can tug at the seller’s heartstrings, or make you slightly more memorable, or if the seller can picture you in the home, taking care of it and loving it, you may have a better chance of rising to the top of that mound of offers. Some buyers have even shared that their letter even helped them win a bidding war with a lower offer—but we wouldn’t count on that! There’s some evidence that love letters are effective. One study showed that writing a love letter increased a buyer’s chance of winning the home by 9%. Not huge (especially when an all-cash offer increases the rate of success to 28% by comparison), but still a bump in the right direction. So writing a love letter sounds like a no-brainer, right? Not so fast. There are definite risks to submitting a love letter with your offer. The seller might have an unconscious bias that your letter taps into—in the wrong way. Say for example that the sellers are allergic to pets and always kept their home spotlessly clean and tidy. If you share that you can’t wait for your slobbering St. Bernard to bound around the living room, the seller might be less likely to accept your offer. You can be at a disadvantage after the inspection. Say you’ve extolled the virtues of this home in a letter and you express your commitment to purchasing it. If they accept your offer, then the inspection shows some unexpected defects, the seller knows just how much you want to buy the home. They might not be willing to negotiate; after all, you LOVE the house...right? The seller might not appreciate hearing your stories. What if the seller is going through a divorce, or just lost a loved one? Not every home sale is based on a happy occasion. Sharing that you’re newlyweds might strike a nerve and push the seller away from your offer. There are some very real ethical issues to consider.

Where real estate is concerned, sellers are prohibited from discriminating against buyers in protected groups such as race, gender, or family status, among others. Sellers could be accused of discrimination if they pick one buyer over another. This can result in litigation, which, as real estate advisors, we want to avoid unconditionally. We also feel it's important, particularly through the lens of racial justice, to work hard at dismantling any practices that contribute to systemic racism. Love letters could certainly fall into that category without vigilance. As a result, many seller's agents screen the letters and share only the gist of them, after removing all identifying personal characteristics. Oftentimes this dilutes the power of the original message, but it’s necessary to protect both parties ethically and legally. The takeaway: Words evoke emotion, but good finances evoke trust. A home sale is a huge financial transaction. If your offer is complicated, or your finances aren’t in order, no letter will help you win the home of your dreams. Keeping your focus on making a clean and solid offer is vital; don’t get distracted. If your offer is simple and your finances are clear, ask your real estate agent if writing a letter is the right choice for your situation. 

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With their complementary communication styles, responsiveness, competence, and ability to truly listen, Ellie and Liz enable their clients to feel at ease throughout any real estate transaction. They would welcome the opportunity to be your next real estate advisors.

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