I understand the trend of sending a personalized note when placing an offer on a property especially when there may be a multiple offer situation. I as a broker adamantly refuse to open and review such attachments to an offer and I advise my selling clients to avoid yet it is their decision.
As a listing broker I provide a service to my clients. In the event of a multiple offer situation (which may also suggest the residence is priced below market thus the strong interest) I review the offers, present the offers and will opine which I believe may be strongest and the one to proceed with.
Choosing the strongest offer may include a verifiable pre-approval letter. A larger down payment leading to a potentially easier loan process. Other variants may include a check for the earnest money or down payment provided with the offer versus an IOU i.e. to be tendered three days after mutual execution of contract.
Personally I am not a fan of waivers of appraisal and inspections. Yes such waivers may be attractive to a seller however if issues arise and worse one enforces specific performance there is generally ill will at the closing and worse potential litigation in the future.
Back to Love Letters, I hate them. Again I understand the psychological comfort associated with composing and sending with an offer. I as a buyer have too been tempted but also know as a Broker the strongest offer is the winning offer. As I advise clients in a multi-offer situation; I do not care what is the highest price offered I want the offer that will close.
As a Listing Broker the Love Letter puts us brokers in jeopardy of potentially violating multiple local, state and federal laws concerning Fair Housing. Many letters come with pictures of the prospective buyers. Such letters usually include detailed information concerning occupation, ethnicity, family structure, disabilities and so forth. Such information, even being exposed momentarily, while you may not be bias may alters one’s subconscious decision-making process. This is why I advise do not open or review Love Letters when working with sellers.
As a Buyer Broker I understand the desire by clients to enhance their position in a multi-offer situation. I always advise buyer clients to have their paperwork done prior i.e. pre-approval if a loan is procured, have inspectors and others lined up prior to be able to offer an expedited schedule and subsequent close and to not have an emotional attachment to real estate as options are always available.
The following distributed by the Colorado Real Estate Commission and Department of Regulatory Affairs transcends boundaries. I have shared the advisory with peer Brokers in both Colorado and New York: Real Estate Broker Licensee Advisory: Buyer Love Letters
Some readers are familiar with my personal journey concerning our present NYC residence. We had actually looked at another apartment that we truly loved. A spacious duplex (2 levels) in a neighborhood we truly desired. I literally walked by the building multiple times day and night checking out our future apartment. Not to provide details but the deal fell apart. Were we feeling dejected? Yes.
However we continued to look and found the apartment we are in at present. We truly love our apartment including the wood-burning fireplace, our building, the staff, management, private courtyard and our neighbors!
I continue to walk by the other apartment building (on way to my NYC office) and now realize beyond the apartment, the building was not as desirable as where we are now. The monthly Maintenance/HOA dues is much higher, staff and management did not seem overly welcoming and we are in the same neighborhood on what many peers suggest is a nicer street with fewer cars and cross-traffic.
While I challenge myself with the mantra “Things Happen for a Reason and Will Work Out in the End”, it is true. In real estate we sometimes get caught up in the emotion and perception of what will make our lives complete, wholesome and happy. I should know, as a real estate broker I am one of those salesmen. I do believe home ownership is important on many facets from wealth generation to stability to tax benefits. However there are always opportunities when you least expect and why we should all keep open minds when working in real estate and please avoid The Love Letter.