When A Letter To The Seller/Landlord Works…And When It Doesn’t!

Business | November 18, 2020


We’ve all read that story in the newspaper about the lovely couple bought a house after they “won” a multiple offer situation, with an extremely inferior offer, all because they wrote a lovely, heartfelt letter, right?

Some buyers will read this, absorb it, and hold it like grim death.  Then when they want to offer $50,000 under the list price for a house that has six offers registered, they’ll refer back to the article they read and say, “We’re hoping that a personal letter will help.”

Other buyers simply recognize that a personal letter of introduction can’t exactly hurt, and that perhaps in a sea of names without faces, the seller might remember them and maybe, just maybe, look favourably upon them if everybody and everything else was equal.

I don’t typically advise my buyers to submit letters in multiple offers, but if a property has been sitting on the market a while, and we know there’s going to be a negotiation, it’s not a bad idea.

In today’s market, I’m seeing letters submitted more than previous market cycles.  Not just with purchases, but rentals too.

Rentals?  Really?  Isn’t’ the rental market slow?

Yes, it is.  But some rentals are hot.  And unlike the resale market, where most sellers don’t care who buys the house, but only how much they’re willing to pay, a landlord does care who rents the property.  A lot, in fact.  So a letter from a prospective tenant can make all the difference.

Yes, a letter from a prospective tenant can make all the difference…….but not always in a good way!

It might not seem like rocket science to you, but sometimes the letters submitted with offers backfire spectacularly.

I had a listing down in the St. Lawrence Market area last month for which I received two offers.  Both had accompanying letters, and these letters made all the difference in the world.

Here’s the first letter:

Dear (Landlord Name),

We’re a responsible and respectful couple who, together with Chewie, the most handsome member of our little family, would love to lease your unit: (Address).

We are from Portugal, but we lived in Copenhagen, Denmark, for four years before relocating to Toronto.  I work in marketing while (Name) is a CEO at an IT firm here in Toronto.

We both have demanding jobs, which we’re passionate about.  Mindful of our work’s demands, it is of high importance to find and care for a place we can call home.

(Address) combines beautifully and seamlessly all of our wishes.  My office is located in the heart of St. Lawrence, whereas (Name)’s is also within walking distance.

Most of our free time is spent walking in parks with Chewie, nesting, and just relaxing in our home.

We’d love for (Address) to be our next chapter.

Feel free to reach out at any time.  I’d be happy to answer any inquiries.

Looking forward to hearing from you.

Very nice!

The landlord loved it.

The tenants were complimentary about the unit, mentioned how they want to take care of it, and it’s nice to put faces and personalities to the names on the Offer to Lease.  The tenants seem to have stable jobs and are hard-working, and they have roots in the area.

This was exceptionally well-received by the landlords.

The next offer was from an agent on behalf of her mother, who would be the tenant.

Here’s her note:

I know this is a little under your client’s expectation but given the declining rental market and lots of other competing options in the building, I hope we can make a deal come together. I understand that the landlord wants a good tenant who will pay rent and she’s getting exactly that. I am representing my mom, she’s 52 with a very secure job at the City of Toronto. Excellent credit score and practically 0 obligations/debt. She will care for the unit as her own – not a smoker, no pets and very quiet/clean.

To give your client some piece of mind we are offering 4 months of rent up front. Also, I am waiving my commission in hopes of getting this done – that way your client is getting cashflow starting in 2 weeks and has no out of pocket expenses. 

I have my mom’s credit report, employment letter and latest pay stubs ready. Let me know if you want to review right away or present the offer to your client first. 

This was exceptionally poorly-received by the landlord.

“….given the declining rental market and lots of competing units in the building,” isn’t exactly incorrect, but you catch more flies with honey, right?

The landlord could feel the sales-pitch here.

“…that way your client is getting cashflow starting in two weeks and has no out-of-pocket expenses.”

The landlord knows this, and didn’t feel the need to have it pointed out to her.

She felt that this note was condescending and undermining, and when stacked up against a lovely letter from a nice couple (nevermind that it was $300 below the list price…), this second offer never had a chance.

I had another rental listing that received two offers, this one for a freehold house.

Both applicants were families; the first with four children, the second with only one child.

The first applicants, however, didn’t have nearly as good credit as the second, and their income was far lower.  They also had employment that would be less stable.

But one thing they did have?

This letter:

Dear (Landlord Names),

(Name) and I wanted to write you a letter to tell you a bit about ourselves because, well, we fell in love with your house from the moment we walked in the door (actually, we’ve come twice in the past 3 days!) and we’d feel blessed if you’d give us the opportunity to call it home.

We met in 2014 (place, circumstances redacted).  (Name) was an ethnomusicologist and performer with three kids and a dream for her single-parent kids to have a better future.  I was a Canadian folk violinist and composer who’s focus was on building community through music and bringing the traditions of his ancestors to a wider audience.  They say intense situations make you realize who you are and what you want in life; it didn’t take long for us to realize that we wanted to spend the rest of our lives together.

We traveled with our kids when we could, but the Junction was our home. We bought a building just down the street from you, just a bit further down from my childhood home where my parents still live.  With their incredible support and the supplementary income from our rental units, we decided to have another child.  (Name) is now almost three.

The pandemic changed the nature of our industry and while we worked hard to adapt to working off the road, we realized that our family had grown out of our apartment.  Our eldest daughter, now 24, had moved to Montreal, but our three-bedroom was still a bit tight given our circumstances.  I started to build a recording and production studio in the separate open-concept basement (almost complete!) and we started to look for a bigger place to live.

We saw a LOT of apartments and houses, but to be frank, yours was the only one we walked through and felt like we could call home.  The bright separated third-floor rooms for our older kids (Name) and (Name) would be perfect.  (Name) would finally get her own room, just down the hall from ours (with its own walk-in and ensuite bathroom!).  The amazing kitchen flow would avoid crowdedness on busy school day mornings and the spacious dining/living room with its beautiful bay windows!  Nevermind the pergola in the backyard – ideal for summer dinner parties with grandma and grandpa.  Even the basement could double as a luxuriously large storage space and a guest room for our eldest when she comes to visit.  All just a 5-minute walk from our new studio – what could be more perfect?

As landlords ourselves, we know how important it is to find responsible, trustworthy tenants.  Especially now, we all want to avoid stress and risk – if the time and energy it takes to manage rental relationships can be minimized, we can focus on what’s important in life, whatever that happens to be.  We hope that our understanding of this part of the equation from a personal perspective (as well as our attached paperwork) will help you feel comfortable, confident, and excited about having us as tenants.

We hope we’ll get the chance to know you better in the coming months and years.  In the meantime, if you have any questions or concerns about our application, please feel free to call me at any point.

Sincerely, 

(Family Members)

Wow!

Tell me this is over-selling it, but the landlords certainly were smitten!

When it comes to letters to landlords, they’re about ten times as important as letters to sellers.  The landlords own the house and may have lived there themselves.  They may return back to live there again some day.  So to hear that the tenants are going to cherish the property as it were their own, take care of it, and in this case – are landlords themselves, is music to a landlord’s ear.

More now than ever, landlords are worried about “problem tenants.”  Once your tenants are in the house, you can never get them out!

So letters like this do wonders to calm the nerves of any landlord out there.

We had a second offer, as mentioned above.

The second candidates did have better credit and higher incomes, but they didn’t have a letter.

I told their agent, “The other offer had an accompanying letter which I think will really help the sellers to decide on which path to go down.  Do you think you can get your clients to write something?”

He said that he would.

So I waited until the end of the night, hoping to get a second letter to send to the landlords to assist in their decision.

Later that evening, the agent wrote back, “This is as good as it’s going to get,” and copy-and-pasted the following:

We’re a young professional married couple with an 8 month old baby, native to Toronto looking to settle down in the Junction neighbourhood. We are friendly, outgoing, courteous tenants who have had significant experience renting in Canada and in the U.K. (Name) works as a venture capital investor.  (Name) is an elementary teacher, currently on maternity leave.

Nothing really wrong with this, per se.

But it can’t hold a candle to the first letter, can it?

More to the point, I specifically told the agent, who specifically told his clients, that the first people had a letter, and that it would factor into the decision.  To receive the above three lines with, “This is as good as it’s going to get” was a signal to my landlord-clients that the second set of prospective tenants just didn’t care, and/or couldn’t be bothered, to sit down and write something more robust.

Maybe they didn’t care.  Maybe they had other options.  Maybe you’ll tell me, “David, the rental market is slow out there, these people don’t need to kiss your clients’ asses with letters.”

Maybe.

But there was nothing else like this on the market, in the area, at this time.  We did end up with multiple offers, so clearly there was demand for the property.  And in the end, the landlords loved the idea of renting to the first family, and made that personal connection with them through their letter, that they chose them instead of the second couple.

Now when can a letter absolutely backfire?

Oh, man.  This next one is an absolute doozie, folks!

I had a listing, priced at $549,900, for which we received the lowest offer I’ve ever received in my sixteen-year career: $460,000, or 83.6% of the list price.

The offer was absurd, even more so because we just sold this condo for a few thousand dollars under the list price.

But the letter that accompanied this offer was bizarre.

Dear Ms. (Name Redacted)

My Name is (Name Redacted) and I’m a first-time homebuyer. When I walked into your condo this week, it was the first time I experienced that “home, sweet home” feeling. From the kitchen island I dreamed of, all the way to the cozy bedroom and renovated washroom, it was an undeniable love at first sight!  Living in the city in my 20s has always been a dream, and while I only have a few years left in the 20s club, I hope to make this dream come true!

Liberty Village is the perfect combination of work hard, play hard and this motto resonates strongly with me, more than any other.

“Home” was never sweet for me at a young age. Growing up in a very hostile environment, where my father often subjected my mother and l to abuse, home became something that her and I feared returning to, yet we had no escape. She had no financial means, and we relied on him for our basic means of survival. I had to always work twice as hard as those around me, to get university scholarships and that next promotion. Many who didn’t know me perceived me as aggressive and excessively competitive, but to me, it really meant one day, we would see light at the end of the tunnel.

The pandemic really highlighted many things over the past few months, and for my mother and I, it was our problematic household. For us, it was the unbearable living conditions that intensified. She had many fears of initiating a divorce, and although we all knew it was the right decision, we can’t imagine the reaction our father will have in a week when he receives the application. If the pandemic taught me anything, it’s solidarity around the globe, and of course with family. I finally saved up enough to instil her with confidence, we can take the matter to the Superior Court of Justice. Now I’m trying to find us a safe-haven to which we can escape, and I’m confident she’ll love your home as much as I do.

Purchasing a home is one of the biggest investments we make in our life, and I’m looking forward to investing in this one. While I do understand my offer is less than your asking price, I hope you can really feel the love I have for this place and rest assured the challenges of my circumstances will make me cherish it more than most others.  

I do have a mortgage pre-approval and am very flexible about the closing date. I hope to give this condo as much love and care as you gave to it.

Thank you for your time and consideration.

Warm regards,

(Name Redacted)

Man, I just don’t know what to make of this.

Neither did my client.

You want to believe that only a truly wicked person would write something like this if it weren’t true, but on the other hand, you wouldn’t put it past people out there in society today to try something like this.

True or not, it’s odd.  Bizarre.

Let’s assume this is completely factual, and then ask the question: why does this have any bearing on the transaction?

Many, if not all of us, have undergone adversity in our lives.  I can’t picture a single one of us who doesn’t have a sad tale to tell, and not that it’s a contest, but some of us have more pain in our pasts than others.

But as my client wondered, what does this have to do with the transaction?

My client wondered if she was supposed to “help” this buyer.

My client wondered if the buyer’s adversity was being cashed in for $90,000.

My client simply wished that this screaming lowball offer had been submitted without the accompanying letter, because to be quite honest, she wanted absolutely nothing to do with this buyer.

She was effectively being put in the position of a virtual social worker, and being asked to put her livelihood on the line for a complete stranger.

The $90,000-under-list offer was misguided, but I told her, “Never let a deal die,” we can sign this back at the list price.  Just keep it going to see their next move.

But the seller wanted no part of it.

The setter was just so damn off-put by the letter.

While I do understand my offer is less than your asking price, I hope you can really feel the love I have for this place and rest assured the challenges of my circumstances will make me cherish it more than most others.”

This was borderline insulting.  Arrogant, almost.  Entitled, perhaps.

“Less thank your asking price.”

Not $5,000 less, or $15,000 less, but $90,000 less on a $549,900 list.

This buyer, via this letter, is either deliberate or clueless.

And I don’t know which one was worse.

The agent representing this buyer called me about one week later just to feel us out, and I told her that I was honestly quite surprised to hear from her.  I mentioned that we had sold the condo for just under list, and she congratulated me.  It was an amicable call, so I told her, “I have no idea what you’re doing with this buyer, lowballing the shit out of sellers, and sending that weird letter.”

“I know,” the agent said.  “She insisted on sending that letter, and I think it’s a really weird thing to do.  But I don’t have the stomach to tell her that.”

I explained that the letter killed any chance of my seller every considering the buyer, or her offer, and that there were other listing agents and sellers out there too that would feel the same way.

She thanked me for my honesty and said she would “try to find the words to tell the buyer the letter was misguided.”

At the risk of using hyperbole, I will say the following: that letter was one of the oddest things I’ve seen in my career.  And what’s even more concerning is that the buyer behind the letter thought it was a good idea!

There are good letters and there are bad letters.

There are good times to submit letters and there are times to just leave things be.

A letter to a landlord is almost never a bad idea, so all of you prospective tenants, keep that in mind.

But as a buyer, you really need to “read the room.”

Because that letter that you want to submit can do all the good in the world, or, completely stand in the way of your goal of purchasing a house or a condo…

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10 Comments

  1. Appraiser

    at 10:18 am

    Here’s a letter to Evan Siddall from Teranet:

    “In October the Teranet–National Bank National Composite House Price IndexTM was up 1.3% from the previous month, the strongest gain for a month of October in the 22 years of the composite index. The rise was led by Ottawa-Gatineau (2.7%), Hamilton (2.1%), Montreal (1.8%), Victoria (1.7%), Vancouver (1.5%), and Halifax (1.5%). There were highly respectable monthly increases for Toronto (1.0%), Quebec City (1.0%), Edmonton (0.6%) and Winnipeg (0.5%). Calgary edged up 0.1%.

    Another sign of firming markets is that for a second consecutive month, the number of sale pairs entering into the 11 metropolitan indexes[1] was higher than a year earlier, and by no less than 48%. This development echoes the revival of home sales reported by the Canadian Real Estate Association beginning in July, recovering ground lost in the severe slowdowns induced by Covid-19 in previous months. The unsmoothed composite index,[2] seasonally adjusted, was up 2.1% in October, suggesting that the uptrend of the published (smoothed) index could persist.” https://housepriceindex.ca/2020/11/october2020/

    1. Chris

      at 11:02 am

      Here’s a letter to Appraiser from CNN:

      “Dow and S&P 500 hit new record highs after Moderna says vaccine is 94.5% effective

      US stocks rallied on Monday after Moderna said its experimental Covid-19 vaccine is highly effective.

      The Dow and the S&P 500 both notched new record highs.

      The Dow (INDU) finished up 1.6%, or 471 points. The index closed only about 50 points below the 30,000 mark, a level it has not crossed in its history.

      The S&P 500 (SPX) closed up 1.2%, and the Nasdaq (COMP) ended 0.8% higher.”

      https://www.cnn.com/2020/11/16/investing/dow-stock-market-today-moderna/index.html

      Meanwhile real estate markets like Ingersoll, Tillsonburg and Quinte are are on fire and up >20% YoY. And despite massive economic damage, Canadian households and businesses are holding on to more than $170 billion in excess cash according to a CIBC report this week.

      “We’re in a very weird situation in which the economy is down, but the level of cash in the economy is rising. We’re seeing a situation where the savings rate is going up, spending went down dramatically, but income actually went up because of government support and the fact that many people did not see their income going down”

      – Benjamin Tal, CIBC

      As I’ve said before, it’s glaringly obvious that both the stock market and the real estate market are being propped up by monetary and fiscal stimulus. I have no clue how anyone could believe that one is rational and sustainable while the other is not.

        1. Chris

          at 1:23 pm

          I’m not really commenting on if it’s a good or bad thing. My point is that these support measures have seemingly gone too far, and been poorly targeted.

          Stimulus provided has outweighed lost income by a substantial margin. Assets of all stripes have seen valuations inflated, with stocks, real estate, gold, Bitcoin, all surging. And Canadians are sitting on a stockpile of cash.

          I have no problem with supporting those who need it, but as it stands, we’re taking on debt to provide funds to those who are doing just fine.

          “I suspect it’s not unthinkable that some of this money went to people that didn’t need it”

          – Ben Tal, CIBC

          https://nationalpost.com/news/politics/household-savings-in-canada-skyrocket-during-pandemic-as-ottawa-doles-out-billions-in-emergency-benefits

  2. Appraiser

    at 3:23 pm

    “Mortgage interest cost falls, while homeowners’ replacement cost rises”: StatsCan

    “The mortgage interest cost index fell 0.7% on a month-over-month basis in October, following a 0.5% monthly decline in September. Mortgage rates continue to face downward pressure from lower interest rates following reductions in the Bank of Canada’s policy interest rate in March.

    Lower interest rates continued to coincide with increased demand for single-family homes. This, along with higher building material costs and low inventory of homes for sale, contributed to higher costs for new housing, with new home prices increasing at their fastest pace in 14 years. The homeowners’ replacement cost index, which is derived from the price of new homes, rose 1.4% month over month, the largest monthly increase since June 1991.”

    https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201118a-eng.htm

    1. Bal

      at 6:38 pm

      I must say that the house prices are insane and I regret for not buying in May….I was about to give an offer on one of the semi and that time asking price was 800,000 and now similar Semi sold for whooping 1 million….$200,000 price increase within six months. I feel like pulling all my hair..lol

  3. Appraiser

    at 4:06 pm

    Interesting analysis from RateSpy

    “…Mind you, home prices are up 315% since 1991, according to CREA. And yet, mortgage payments have risen just 98% in that same timeframe. That’s the magic of plummeting rates.

    The most mind-blowing part: Even though Canada’s average home now costs over four times more in nominal dollars, someone with 35% down would pay roughly $3,300 less interest to mortgage it today… ”

    https://www.ratespy.com/how-far-weve-come-111716830

  4. Clifford

    at 11:36 pm

    Reminds me of my tenant who lost her mind over a rent increase (still below market value even in the pandemic). She went on and on about being mistreated and bullied and how in today’s market that I should be lucky to have a tenant like her. Rents are tanking blah blah blah. I really dislike people like her. Trying to use the pandemic to leverage cheaper rent. Yes, if you’re impacted by it and have trouble paying, sure, we can work something out. But if you are not impacted and you’re paying less than what the last 5 units are leasing for today, then using scare tactics then I don’t get the angle. Rents are cheap. Give your 2 months notice and leave.

    I also sold a condo recently, same tactic from the agent “nothing’s selling, prices are tanking” blah blah blah. I stuck to my guns and the agent had to put in commission to make the deal work.

    People are using fear of the pandemic to get crazy deals…Good for them. I refuse to give a property away. I’ll keep it and sell when the market improves or find a buyer with some sense.

  5. Marty

    at 1:27 pm

    BEST WORD: ethnomusicologist

    I might even wait a week to look it up.

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