Buyer's Letters - Part I

"Buy on bread, sell on cheese"

In the wine industry (which I otherwise know nothing about), that means if you're a wine buyer, you'd be well-advised to eat a piece of bread in between tastings. Because bread is neutral, it will clear your palate for the next wine.

By contrast, If you're a slightly shady wine seller -- especially if it's not exactly 1983 Bordeaux -- supposedly you offer cheese to prospective buyers in between tastings. Cheese has a reputation for distorting the palate, which makes judging wine harder.

In my opinion, Buyer's Letters play the same double-edged role in residential real estate that cheese does in wine tasting. If you're a Buyer, it may positively predispose the Seller towards your offer, so why not? However, if you're a Seller -- especially an emotional one -- heads up.

Realtors tend not to be fans of Buyer's Letters (I'm one of them), for two reasons. (*If you're a Realtor who disagrees, please feel free to comment at the end of this post.)

First, consider the famous legal quote about arguing a case: "if you don't have the facts on your side, argue the law. If you don't have the law on your side, argue the facts."

In real estate, if your Buyer is making a great offer . . you sell the offer. If they're not . . . you try to sell the Buyer.

Which brings up knock #2 on Buyer's Letters: they often verge on the treacle ("we loved your home from the minute we walked in the front door"), and can, shall we say, embellish. They're also highly predictable.

I don't know that I've ever caught anyone in a red-handed lie, but there certainly seems to be a "Lake Wobegone" effect at play, especially if the prospective Buyer is a family: the couple is always attractive and likeable, the kids (if any) adorable. And it doesn't hurt that they absolutely love your neighborhood and home (who wouldn't?), will cherish it like you have, etc.

That kind of pitch may not be that compelling if you're an executive who's moving for the fourth time in seven years. However, if you're retirement age, and selling the home you raised your family in and have lived in for decades, it's a fair bet that the process is quite emotional.

I've certainly seen plenty of sincere Buyer letters, and it's hardly the case that Buyer's letters and strong offers are mutually exclusive.

However, my standard advice to Sellers is to focus on the Buyer's offer, not the Buyer. There's plenty of time to bond after a deal's been struck.

Part II: Three Types of Buyer Letters