This piece of info just came in from the NY Times. Does anyone here remember house shopping during the days of the rapidly escalating prices circa early 2000′s? Agents with buyers wrote very personal letters to sellers in the hopes of pitching their clients’ bids. I remember my agent at the time suggested it was a good idea to go on a trip to the client’s yard sale for a little meet and greet. (The bid still fell through.)
But, anywhoo, this NY Times article talks about a new kind of reality check letter. The letter pitches the reasons why in real estate market terms, the potential buyer is placing a reasonable bid (even if it’s say, so far below asking price that it makes the seller pause to make sure his eyesight is okay). Check out some of the lovely prose yourself.
I’m writing to let you know that I would like to make a bid on your property. I love the area and am committed to buying a house nearby. And your home fits my needs.
But given that my offer is well below your asking price, I also feel I owe you an explanation.
First, consider the big picture. Nationwide, home prices in the first quarter of 2008 fell 14.1 percent compared with the same period a year earlier, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index.
That’s the biggest decline in the 20-year history of the data. And just in case you’re wondering, during the housing downturn of the early 1990s, the decline was never worse than 2.8 percent.
Not only that, earlier this month, the National Association of Realtors pointed to the huge number of existing homes on the market. As of the end of April, the total number was 4.55 million. At the rate people are buying right now, that represents an 11.2-month supply.
So buyers have options right now. A lot of them. I’m no different. Your home is great, but it isn’t unique. Few homes are. I know this may be hard to hear, since you’ve spent years creating memories here. But you may be waiting a long time if you hope to find a buyer with the same emotional connection that you have.
My mindset is hardly unique. We’ve all been reading the headlines. The accompanying articles appear prominently in major newspapers and sit on the Web pages where people check their e-mail every day. Everyone sees them, and the psychological impact is real.
Has your real estate agent laid any of this out for you? Maybe so, and you didn’t want to believe it. But it’s also possible that your agent, afraid of offending you and losing the listing, simply doesn’t want to initiate that sort of discussion. It may be worth sitting down for a candid reassessment.
It will be tempting to view my low bid as an insult. Please don’t make that mistake. Your home is genuinely appealing, and I wouldn’t have written this note unless I was serious about buying it. Getting a firm offer in this market is an accomplishment. So congratulations!
Oh, and one more thing. You presumably need someplace to move. My guess is that you’ll find these same points compelling when it’s your turn to buy. You just might succeed in buying for a better price, too.
I look forward to hearing from you soon.
What do you all think? Is this worth a try? A bunch of crock? Comments are always appreciated. My personal take is the letter was pretty good until it congratulated the seller for getting an offer. That came off kinda patronizing to me.
With that, I leave you with a few LAX properties where the sellers are dropping the price.
Playa Del Rey
7740 Redlands, #G3095/2bd, 2bth/$430,000 to $420,000
6011 Dawn Creek, #7/3bd, 2.5bth/$879,000 to $849,000
6906 W. 84th Pl./3bd, 1bth/$748,000 to $709,000/