In a highly competitive buyer’s real estate market, buyers and buyer’s agents turn to the offer cover letter to personalize the homebuying process and distinguish their offer in the seller’s mind.

Cover letters and the competitive market

Consider a first-time homebuyer searching for a house for their family. They find their dream home in the perfect neighborhood but their agent informs them multiple offers have already been submitted. In order to make their offer stand out from the rest, their agent recommends they write an offer cover letter explaining their situation as a way to connect emotionally with the seller.

The offer cover letter, also known as the buyer’s letter to the seller, is a tool many agents suggest to their clients as a means of gaining an advantage in the homebuying process. More popular in previous decades, offer cover letters are making a comeback as the real estate market rebounds and competition increases.

A recent study on the bidding wars in the real estate market found properties for sale are met with competing offers at least 60% of the time. In Los Angeles, buyers are bidding against each other in 76% of listings; in San Francisco the number is 94%. The same study found 43% of the winning offers made on competitive properties used offer cover letters in conjunction with a strong bid.

Informed agents know a buyer’s letter to the seller is no guarantee an offer will be accepted, but it can be the perfect vehicle for distinguishing their offer in a sea of similar bids on a dwindling number of highly-coveted homes. When dealing with competing offers, a similar bid grabs attention, but a well-crafted letter to the seller seals the deal.

Perfecting the offer cover letter

All offer cover letters follow the same basic formula. However, their effectiveness is determined by how the formula is personalized. With a focus on individualization in mind, buyer’s agents need to inform their clients that successful letters to the seller contain the following:

  • a brief biography of the buyer and their family;
  • what the buyer loves about the home;
  • why the location is perfect for them; and
  • pictures of their family to personalize.

Along with these four essentials, buyers benefit most by adhering to this advice:

Know your audience. If the house is owned by a bank or an investor, chances are slim the offer cover letter will have any effect. These letters are meant for people open to the possibility of connecting with the person or family who buys their home. Banks and investors are only open to the possibility of making the most money.

Be genuine and sincere. Everything in the offer cover letter is designed to make an emotional connection with the person selling their home. This is impossible to accomplish without being polite and authentic. The goal is to have the seller recognize the buyer as an actual human being and not just another name on a piece of paper. Sellers, especially those who have lived in the same house for many years, want to know their home will be taken care of by the person who buys it — a feeling which needs to permeate the writing. If after reading the letter the seller thinks “these are such great people, I’m okay with accepting the second highest offer,” then the buyer has succeeded.

Paint an emotional picture. As cover letters rise in popularity, sellers will become more discerning about the letter they allow to sway them. In other words, writing a letter about how quaint the kitchen is won’t be enough — five other potential buyers have already done that. Instead, when a buyer describes what they like about a seller’s home, their letter needs to convey the buyer’s vision of seeing their family enjoy spending lazy weekends together sitting in the breakfast nook. The letter may also mention the buyer envisioning themselves walking their children to the nearby park or watching them play hockey in the cul-de-sac. This gives the seller a sense of comfort knowing the new buyer will appreciate their home before they decide to sell to them.

Learn about shared interests with the seller. If both the buyer and the seller like to garden, the letter may mention what flowers or vegetables the buyer might like to plant near the patio. If the buyer is a soccer family and they notice a framed jersey during the walkthrough, the letter can mention how much the buyer’s daughter will enjoy practicing soccer in the backyard.

Keep it short. One page is enough. The letter is most effective when it does not overwhelm the seller with information — a long letter may come off as desperate.

After spending the time tailoring the letter to the seller, buyers need to ensure it makes a good impression. This is accomplished by printing the letter on high-quality paper and delivering it in a full-sized envelope.

Sample offer cover letters

Here are some templates for arranging offer cover letters. Sample offer cover letter text is included. Follow the links below to download the customizable templates.

Buyer-Letter-1-[Offer cover letter template #1]

Offer cover letter sample template 2

[Offer cover letter template #2]