HOME-BUYERS SAVE THOUSANDS
WITH “LOVE LETTERS”
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/home-buyers-save-thousands/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
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In these days of escalating prices, things keep getting tougher for home-buyers.
But when a home sold in the Gold Coast hinterland the other day, the owners gave the buyers a generous discount. Although another buyer offered a few thousand dollars more, the elderly owners said, “This young couple will love our much-loved home the way we loved it. We want them to be the new owners.”
The same happened with a home in Canberra – the lady who owned it knocked thousands of dollars off the price because she liked the buyers.
In Queensland, a farmer sold his farm to a young couple for a million dollars less than he could have got by selling to an overseas company. The aging farmer said, “It’s so tough for young couples to get a start on the land these days. I am happy with the price they can pay, but I am also happy these youngsters are going to raise their family here. I feel good selling to them.”
For some buyers, especially those who know how to do it, they are saving thousands.
For one reason – the sellers like the buyers. It’s the personal touch.
The trouble with most agents is they de-personalise the selling and buying of homes. They create conflict. They throw sellers and buyers together like gladiators in a colosseum. As if it’s a financial fight to the death.
As a home-buyer if you can bring a personal touch to the transaction, you can often (probably eight times out of ten) get a better deal.
When I helped Bobby (one of my mates) buy a home for him and his family, I used the personal touch to get him a discount of $80,000. There is no way that he could have got such a discount had he left everything up to the agent.
Imagine how the agent would have done it.
The home was for sale for $499,000.
The agent would have said, “We have an offer from a buyer for $419,000.”
The owner would likely have responded, “Tell them to get lost.”
The agent would have gone back to the buyers and said something such as: “The vendors say you’ll have to do better than that.”
The buyers may have retorted, “The home has been for sale for eight months. It’s in shocking condition and we’ll have to spend $50,000 to bring it up to scratch. And besides, unlike what’s happening in the cities, prices in this town are going down.”
The agent may have gone back and said, “They know you’ve had it for sale for months. They reckon it’s going to cost $50,000 in renovations. And, on top of that, the market is falling which means if you don’t take this offer, you could be forced to accept less in a few months.”
Such talk makes sellers angry. Chances are they’d have said, “Who do these buyers think they are? Tell them I won’t sell to them at any price.”
Such statements happen – more often than you realise.
It’s easy to be blunt even rude to someone you don’t know, someone who’s known simply as “the vendor” or “the buyer”.
So how did I get Bobby a discount of $80,000?
Simple: I helped Bobby write a love letter to the owners.
Yes, you read it right – a “love letter”.
And it worked. Better than either Bobby or I anticipated. To our delight, the owner accepted the offer, a full $80,000 below the asking price. A discount of a mammoth 16 percent.
My love letter wasn’t too emotive, it didn’t tug too much at the heart-strings, but it was logical in its reasoning, it was super polite without being obsequious. But it was its reference to the market conditions that the owners found compelling. They loved our love letter.
Okay, I didn’t call it a “love letter” but I have since found out that this is what these letters are called. They are rarely used in Australia, but in America they are common
In many parts of America, just like in Australia, the real estate market is booming. Often, there are multiple buyers for the same property. And, instead of offering more money – which many of them can’t afford – buyers are offering a better story, in the form of a love letter.
In America, real estate love letters are now so common that sellers often get several letters from different buyers, all asking to be the chosen buyer.
And they work. Not only does a love letter secure the home it also secures a better price.
Buyers who have made lower offers are regularly chosen ahead of buyers who’ve offered higher prices. It’s true, life is not all about money – especially for elderly sellers whose need for money is no longer as great as when they were younger.
Home-owners who have lived-in and loved their homes for years can get very emotional about selling. They are the quintessential reluctant sellers. They want the home to be sold to someone who will love it as much as they loved it. Given a choice between selling to, say, a rapacious property developer who’s going to knock-down the home or a young couple who want to raise a family in the home, well, many owners will prefer to sell to the young couple. Life is not all about money.
This love letter craze in America has now struck controversy. Imagine what happens when a buyer offers to buy a home for, say, $1.2 million and then discovers the owners sold it for $1.1 million to other buyers.
Discrimination! Racism. Prejudice. Unfairness. Psychological trauma.
In a world which is often described as “political correctness gone mad”, buyers who have missed out on home – especially those who made much higher offers – start to scream. And scream and scream.
Sure, in some cases, there may have been the American equivalent of “our Pauline” who chose not to sell to buyers from a certain part of the world.
Love letters have become so effective in America that tens of thousands of buyers are now writing them. And buying property for tens of thousands of dollars less – thanks to the personal touch.
A love letter sets out your circumstances and why you like a home and why you’d be proud to own it. All emotive and factual, nothing discriminatory. In America, there are now templates that buyers can use as a guide – to make sure they don’t give rise to a claim of discrimination.
But get this: As proof of their effectiveness love letters will be banned in the American state of Oregon from 2022. The authorities in Oregon want real estate to be about money alone.
Of course, life is not like that, no matter how much political correctness may intervene. People buy homes because they love homes. If they live happily ever after in those homes and then, one day, when the “ever after” is nearing an end, they want another family to love and enjoy their home, surely there’s no harm to anyone.
Imagine if homes went to buyers who loved them the most rather than buyers who paid the most.
In conservative Australia most buyers are too shy to write love letters. But, believe it, they work. Just ask Bobby. If you want to see the letter he wrote – or you would like help to write your own love letter – let us know.
If it’s legal and ethical we will do all we can to help you.