If you do not want to follow the Airbnb rental arbitrage route and you are in a position to put down a down payment, it is a good idea to create a sample offer letter to purchase the property. This will help to show your intent and convince the home seller that you are indeed the right person. After all, if the property is located in a competitive market, you are probably not the only interested buyer.
Even if you are a good writer, drafting a sample real estate offer letter to purchase a property to be used for vacation rentals is easier said than done. What makes writing offer letters challenging is that you want your offer to get noticed, but without coming across as desperate.
To help you improve your chances of being successful, here are the essential personal details that you should include and other key takeaways for writing offer letters. We’ve even designed a sample offer letter to purchase property for you!
A sample offer letter to buy a property is a professional letter that a prospective buyer writes to sellers to communicate his/her intention to purchase the specific property.
Buyers can use it to explain to the seller why they are the best buyer. Basically, you can think of it as being almost like a cover letter that you include when you apply for a job opening.
While this type of letter is not compulsory, it is strongly recommended that you complete this extra step and include it along with your concrete offer.
It might come as a surprise to you, but even if you have made the highest offer it does not mean that your offer will automatically be successful.
There are other factors that the seller might also keep in mind when evaluating the multiple offers that they have received.
Not convinced yet that it is, in fact, worth the extra effort to write a real estate offer letter? Here are three ways an offer letter template can help you:
Properties in competitive markets will most likely attract a great number of offers. This can make it difficult for the current owner to consider all the offers equally.
If an offer comes without a letter, it could just be that it gets thrown out immediately because the seller might not think that you are really a serious buyer.
While it is only a business transaction, the truth is that the seller might feel emotional about selling the property. This is understandable. Many memories are created in our homes. It could be the place where they started a family or enjoyed retirement.
By taking the time to write a letter, you can create a personal connection with the seller. This will help the seller to bid farewell to the place that they have likely called home for many years, knowing that the next owner will continue to take good care of it.
No one likes a drawn-out process, especially not when their financial situation means that they need to sell the property quickly. A real estate offer letter can help to show that you have all your ducks in a row and that the sale will most likely continue without any problems.
As mentioned earlier, writing a real-estate offer letter is optional. It is neither a legal document nor is it compulsory which means that there are no strict rules that you need to follow. That said, there is a format to writing real estate offer letters that can help ensure that you remember to include all the critical information.
Sticking to the following format will also help you strike the right tone, which is one of the biggest challenges.
To ensure that you successfully establish a personal connection with the seller in your offer letter which can help you in your efforts, it is a good idea to include their title and surname in the salutation (instead of simply writing “Dear Seller”).
It could be that the seller currently has more than one property listed. To avoid any confusion, remember to include the details of the property you would like to purchase.
It is critical that you have important details, like the amount of your purchase offer, in writing. So, be sure to include this amount again in the letter. To keep it simple, you can omit extra fees, like taxes.
Describing your payment plan not only helps to show the seller that you are indeed serious, but it can also offer you some extra protection by ensuring that everyone is on the same page and that no expectations have been created.
Without turning this into an informal note to a friend, you can share a couple of relevant details about yourself. You can, for example, mention which features attracted you to this particular property and the surrounding neighborhood. Perhaps you are a surfer and have always wanted to be able to enjoy your hobby daily.
To help you connect with the seller on a more personal level, pay attention to the furnishings when you view the property. For example, if it has a study with an impressive book collection, you can mention that you look forward to having a space for a reading nook.
Needless to say, focus on the positive aspects only. If you are looking for a fixer-upper so that you can save some money, this is not the time to mention it. Basically, you want to include details that will be relevant and relatable.
There might be a few conditions that you will want to include. Perhaps you want to get an independent appraisal first or hire a professional company to complete a home inspection on a specific date. There is nothing wrong with including this in your letter.
Time is money, especially in the rental estate business. It is a good idea to include until when your offer will be valid. This will typically be about two weeks.
Your goal is not to pressure the seller, but rather to ensure that you do not waste time on this deal, while other potential properties get scooped up.
Including too much personal information can hurt your application. The following are a few things that are best left unsaid in today’s real estate market.
When writing these types of letters, it is best practice to leave out your race, religion, and gender. In fact, depending on the location, there might be laws in place that prohibit sellers and real estate agents from taking these personal details into consideration.
The seller does not need to know how many other fixed assets you have or that you like to spend a small fortune on shoes every month. The only financial information that matters are your offer price and your payment plan. You should not include any further financial details.
While you want to communicate that you like the property and neighborhood, you should not come across as too invested. This is one of the most common mistakes that interested buyers make.
Just like you want to pay as little as possible, the seller wants to get as much as possible. If you create the impression that you will basically do anything to buy this perfect property, the seller might interpret it as you are willing to spend more than initially offered or even the asking price.
Also, it is easy to tell when someone is insincere. So, avoid creating the impression that you want to use your personal situation to leverage a better deal for yourself.
As mentioned earlier, the seller very likely has some sort of personal connection and emotional attachment with the property. Even though they have placed it on the market, does not mean that they no longer like it. The sale may be a result of a compromised financial situation. Also, they most likely invested a lot of time and money into the property over the years.
If you point out features that you dislike about the property, they can take it personally, and even feel offended. Keep your renovation plans to yourself.
If you plan on digging out half the garden to make space for an entertainment room, now is not the time to mention it.
Even if you want to paint only a few walls, rather keep it to yourself. It might be a wonderful idea and improve the value of the property, but it is better left unsaid. You never know, maybe they see the potential that their property has to offer and decide against selling.
You can let your offer stand on its own feet with the property owner alone. It is not a must to send it to the real estate agent too.
However, while you do not need to send the offer letter to the real estate agent, it can be a good idea to get their input. They have years of experience with regard to the negotiation process and valuable interpersonal skills.
In short, no you don’t. It’s best practice to send your offer to purchase to both the property owner/owners and their selected real-estate agent or agency. Even if it’s just for records purposes, send your letter into all parties involved in the transaction.
To help simplify real estate investing, here is a free real estate offer letter template that you can use to make sure your offer stands a better chance of being accepted:
[Insert your name and address]
[Insert the seller’s address]
Dear [Insert the title and name of the seller]
[Write a short introduction about yourself and the reason for wanting to buy this property.] (“I’m interested in the property located at ___”).
[Write about what attracts you to do this property. Try to relate to the seller, but without coming across as insincere or desperate.]
[Refer to the financial details. While these details will be repeated in the purchase agreement again, it’s a good idea to include details about the down payment, closing date, etc. in your offer letter too.]
[Summarize why you are interested in this specific property and how it will help your real estate business.]
[Your name and surname]
In addition to a real estate offer letter, there are many other useful tools that can help you when you are starting a real estate business.
It is also a good idea to invest in a vacation rental software solution to help you save time and resources. You can, for example, try out the powerful features offered by iGMS.
The benefits of vacation rental software such as iGMS include:
Drafting an offer letter from an offer letter template is so much easier than drafting one from scratch. As stated above, include a small personal note, but not too much personal information.
Express interest as the potential buyer, include the purchase price you’re offering. Don’t include unnecessary financial information in your property offer letter. You’ll also need to include some logistical information.
Most markets are competitive markets so keep that in mind when submitting a offer letter as time is often of the essence. Make sure you write a friendly letter which can effectively communicate your interest in their property. Use our free template above and you’ll be well on your way to property ownership!
About the Author
Callan Riddles is the Content and Social Media Specialist at iGMS. Callan has a passion for finding new ways to help vacation rental businesses thrive. In her free time, she loves to travel, read, and experience all the new things that life has to offer.
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