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Negotiating for a House? Start With ‘Dear Seller’
From yesterday’s NYT, here’s an excellent point-counterpoint on the psychology of buyers and sellers in today’s real estate market by Ron Lieber. It’s presented in the form of a letter to a seller from a market savvy-buyer explaining his low-ball (or more realistic, depending on your perspective) offer on the seller’s home, followed by the seller’s equally market-savvy reply.
A taste:
A few years ago, when multiple bidders would show up at a real estate open house, the truly desperate resorted to writing love letters to the sellers.
Their plaintive scribblings painted a picture of first-time buyers chasing the American dream or growing families hungry for more space. The letters dripped with compliments for the property and ended with a plea for mercy (and a signed contract).
Today’s real estate market, however, calls for a different kind of letter, less a fuzzy valentine and more like a cold splash of water. It’s what you write to accompany a bid that is so far below the listing price that it cries out for explanation.
Inspired by the success of a friend who used this tactic, I drafted a sample letter that buyers who fear overpaying might send to homeowners. Then, I crafted a reply that confident sellers could fire back.
No seller would be happy to get a letter like this. The most powerful missives stoke doubt and create fear. Sellers who get them may be tempted to write off the bidders as lowballers. But it makes little sense not to at least reply, given the number of competing properties in most places and the difficulty lately in getting mortgages.
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I love the seller’s return letter! How true it is and not nearly as demeaning as the buyer’s letter. There are some great points to use in a seller’s counter-offer position there!
Scott, thanks for sharing this article. It was fun and interesting to read those two letters and I can imagine similar conversations happening across the area and the country.
Actually, buying & selling real estate is not only about numbers, it’s also about people’s emotions; both buyers & sellers. In an unbalanced market, everyone forgets that.
However, the savvy buyer who understands that while a seller may have their back against the wall, the sale is more likely to occur if the seller can keep some dignity. I’ve seen offers lately where the buyer not only low-balled, but also removed any grace and dignity the seller had left.
Readers of the Washington Post will see they had a story on it this w/e as well.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/30/AR2008053001502.html