Buyer’s personal offer letter can backfire

Some agents tell their buyers to attach a heartfelt letter to their purchase offer, but other agents say such a letter can do more harm than good.

Q. The housing market in our area is still pretty strong. We made a full-price offer to buy a new house, but two similar offers have also been made. To bolster our chances of being the winning buyers, our realty agent suggests that we write a “personal offer letter” that explains a little about our family and how well we would take care of the seller’s home if our offer was accepted. Do you think that is truly necessary?

A. Frankly, no. I wrote about this issue a few years ago, when the nation’s housing market was even hotter, and many agents were touting such letters as an important tool that could give one buyer’s offer an edge over others.

A personal offer letter can include any and all sorts of information, but most have one goal in common: to tug on the sellers’ heartstrings and make them feel that the letter-writing buyer is more worthy to get the house than other bidders.

Many of the letters I have seen gush about the seller’s property and how the buyers wouldn’t change a thing if their bid was accepted. Others talk about the “love” the buyers felt the moment they walked through the front door and how the home would be the perfect place to raise a family of their own.

If the offer letter works, great, but sometimes it can backfire.

For example, if I make an offer to buy your house and write that I just can’t live without it, how likely will you be to pay for needed repairs or all the closing costs, or make other concessions? Probably not much, which would undercut my bargaining power as negotiations move forward.

There’s also a danger that my letter might offend you, probably by accident. One agent told me about a client who received a personal offer letter from a buyer, stating that the small strip of dirt in the seller’s backyard would be “the perfect place to plant tomatoes.”

The bid was immediately rejected because that’s where her late husband’s cremated ashes were, er, “planted” several years earlier.

And finally, there is a growing number of legal issues involving personal offer letters. They concern violations of the Federal Housing Act, which prohibits discrimination against race, color, religion, sex, handicap, familial status or national origin.

For example, if a letter states something like “I’m a single mom” or “We are recent immigrants seeking to live the American dream,” sellers who reject the offer might open themselves up to a costly discrimination lawsuit, even if the rejection was based solely on a low offering price or other factors.

Those are just a few reasons why many homesellers don’t care about — or even read — a buyer’s personal offer letter unless they think it will strengthen their own bargaining leverage.

REAL ESTATE TRIVIA

There were about 1.34 million licensed and practicing lawyers in the U.S. last year, the American Bar Association reports. That’s more than a 15 percent increase from a decade ago.

Q. We signed a one-year lease to rent a house, but now the owner has sold it, and the new owner has sent us an eviction notice that states we must move out within 30 days. What can we do?

A. First, take a deep breath. Then call your local rent-control board or similar agency for help.

When one rental-property owner sells it to another, any lease that’s in place at the time of the transaction must be honored by the buyer unless the tenant (you) fails to pay rent or violates another term of the lease. You probably don’t have to worry about finding a new place until next year.

Send questions to David Myers, P.O. Box 4405, Culver City, CA 90231-2960, and we’ll try to respond in a future column.