Buying a house these days is like applying for a job.
When buying a house opportunities can be scarce and you have a small window of time to make a shining impression.
The buyer is engaged to be married and they plan to live in the home after their marriage,” writes a San Diego real estate agent Dave Dennis on behalf of his client. “Buyer will cover his own closing costs. … Buyer will credit seller $5,000 towards seller’s closing costs!”
“(The buyer) is well qualified to successfully close escrow on your home,” reads another letter written by Dennis for a separate client. “With strong income and sufficient assets, we expect the loan portion of the transaction to be streamlined.”
Such pitches from prospective homebuyers — also known as love letters — are re-emerging in hot real estate markets like San Diego and other parts of Southern California. They often include family photos and strive to stir the emotions of the seller to give the homebuyer an edge — especially when many bidders are competing for the same property.
The goal is to dazzle sellers and win the deals.
“Whatever we can do to make us stand out and make our buyer stand out, whether it works out (or not,) we just want to make our buyer have a little leg up on their competition,” said Patrick Hale, a San Diego real estate broker who encourages his agents to try different things to help their clients stand out and close the sale.
These love letters, which are included with offers, are not new to the industry but their resurgence is more proof that the housing market is on the rebound after a five-year slump.
San Diego home values ended 2012 at $366,000, the highest median price since June 2008. Meanwhile, the housing inventory in San Diego County is so tight that buyers can get in the middle of bidding wars.
There were roughly 4,100 active San Diego County listings in January, the lowest number in at least 3½ years, show numbers from the Greater San Diego Association of Realtors that start in summer of 2009. While inventory numbers have ticked up slightly in the past two months, which is normal for spring, the listing total is still lower than normal.
Limited inventory and increasing home values have pushed potential homebuyer to do anything extra to help them stand out, something that’s becoming more common — and possibly more necessary — within the past six months, real estate agents say.
Newlyweds Adam and Molly Sarasin saw the odds stacked against them when they started searching for their first home last spring. Four months in, they realized cash buyers were routinely knocking them out of the running.
“It was exhausting,” said Adam, 26. “We definitely found that inventory was too low. … Competition was way too high.”
Instead of giving in, they tugged at heartstrings. The couple submitted a cover letter, penned by their real estate agent, Hale.
“Adam met a wonderful young woman, Molly, and they will soon be getting married,” reads the letter, titled “Offer On Your Home.” “They love your house since it is updated on the interior and will have enough room for an office, their bedroom and what tI hope this gives you a good overview of why Adam and Molly will be the perfect choice for your new home,” says the letter, which ends with a photo of the smiling couple.
The letter helped. The Sarasins beat out at least two other offers for the Poway home. It also helped that they could make a 20 percent down payment, Hale said.
“The seller’s agent, I guess, liked that Molly and I grew up in Poway and went to high school here and had family in town — all of that,” Adam said.
Effective cover letters share similar characteristics. They tend to describe the buyers, from their professions to why they like the homes. Good cover letters also outline clearly what buyers are willing to bring to the table. They typically state the offer prices and perks for the sellers, such as cover closing costs, says Dave Dennis, another local real estate agent who uses cover letters.
“You need to be brief but strong,” Dennis said. “You need to stand out amongst a sea of offers.”
Rancho Bernardo-based real estate agent Mike Safiedine has received more cover letters from buyers and their agents in recent months, an emerging trend he likes. The cover letters condense the important information into digestible pieces and saves him and his client’s time, he said.
Depending on how they’re presented, the letters can help differentiate potentially problematic buyers from more organized buyers who show they’re on time and ready to close.
“It gets me to look twice and talk to the sellers (my clients)” if the potential buyer is professional, said Safiedine, who has been in the business for 16 years.
The personal nature of the letters also works, especially on sellers who have “a lot of attachment” to their properties, Safiedine added.
At least one real estate brokerage in San Diego is trying out a more visual strategy to grab sellers’ attentions: videos. Al Karim Shivji, an agent at California Real Estate and Mortgage in San Diego, has self-produced a couple of videos of himself summarizing his buyers’ offers for sellers including some details about himself.
“Nobody wants to read an essay,” Shivji said.
Shivji tries to get the potential buyers to star in the videos themselves but many are camera-shy.
The two videos made so far have been well-received but they’ve yet to help him close any deals, Shivji said.
Even though the videos are all less than five minutes, they take almost four hours to make. Shivji is still deciding if that’s the best use of his time and if there’s a way for him to produce a template to expedite the production process.
Until he figures that out, Shivji is sticking mainly to the cover letter strategy and making sure he follows up with sellers for his clients.
hey hope to soon be a baby room!
More from Union Tribune’s article today from Lilly Leung.