Rob and Julia Israch won a fierce bidding war for a three-bedroom townhouse in Mountain View, Calif., late last year even though their $750,000 offer?while $92,000 above the asking price?was topped by 11 rivals and was several thousand dollars below the highest bid.
A key reason: The seller, software engineer Lev Stesin, was moved by a letter in which the Israchs said they worked in the technology industry and explained how the home?s spacious layout would be perfect given the imminent arrival of their first child. Among other things, the townhouse has three bathrooms, a wood-burning fireplace and a roomy backyard.
?I felt very comfortable with these people,? said Mr. Stesin, himself the father of a toddler. ?I really wanted this place to go to somebody in a similar situation.?
In an echo of the last housing boom, ardent pitch letters from eager home buyers are popping up again in hot U.S. real-estate markets like Silicon Valley, Seattle, San Diego, suburban Chicago and Washington, D.C., housing economists and real-estate brokers say.
The heartfelt missives, often accompanied by personal photos, aim to create an emotional bond that can give their writers an edge?especially in situations where multiple bidders are vying for the same house. And the reappearance of buyer pitches, also known as love letters, offers further evidence that the housing market is rebounding after a five-year slump.
Last year is likely to have been the first since 2006 in which home prices rose. Meanwhile, inventory is tight. There were just 2.14 million existing homes for sale at the end of October, down about 22% from a year ago to the lowest level in a decade, the National Association of Realtors estimates. Sales of existing homes in November rose 14.5% from a year earlier.
?The market has gotten so crazy that money alone doesn?t talk,? explained Glenn Kelman, chief executive of Redfin, a real-estate brokerage that operates in 19 markets. In 2012, 70% of the offers handled by Redfin agents faced competing bids. In Silicon Valley, the figure was 95%.
?It?s really a seller?s market,? said Mrs. Israch, a Facebook account manager. ?This market is ridiculous.? She and her husband, a senior manager at NetSuite, submitted their first pitch letter while bidding for a different Mountain View townhouse last fall. They lost that one, outbid by seven of the 11 other would-be buyers.
A pitch letter worked during Sandy S. Kuo and Syed Ahmad?s third attempt to buy a home in nearby Saratoga, Calif. The Microsoft? and International Business Machines managers began house hunting in earnest after their July wedding. They had written letters unsuccessfully before. This time, they went into more detail about why they felt at home in a three-bedroom ranch listed for about $1.05 million.
?We imagined how we could set up the patio for BBQs, we discussed where our future baby?s nursery could be,? their two-page letter explained.
Gary Barnett, who was selling the house on behalf of his late mother, said the letter ?was very nicely done.? But with a $1.13 million bid, he said, ?they also had the best offer.? The sale closed Nov. 15.
Extra effort involving a pitch letter paid off for Jonathan Duryee, a civilian management trainee for the U.S. Navy. He initially failed to snag a four-bedroom home in San Diego last October despite sending the seller a letter with four pictures of himself, his wife Nancy and their 10-month-old son. After the original buyer withdrew, he emailed the seller a new photo of his baby and two dogs around a handwritten sign that read: ?We would love a big yard!?
?It really made me try to put these kids into the house,? said Scott Pursell, a veteran builder who was selling the home, which he acquired as a rental property 20 years ago. He even rejected an all-cash offer $25,000 below the Duryees? $550,000 bid for the $549,900 dwelling.
Pitch letters prove particularly effective when they create a personal connection with longtime occupants. Last fall, Judy Blankenburg and her sister decided to sell their three-bedroom childhood residence in Los Altos, another Silicon Valley community. Their mother, who died in July, had called it home for 68 years.
?My sister and I had a huge emotional attachment to that house,? said Ms. Blankenburg, a retired chemical analyst. ?We didn?t want it torn down.?
The sisters accepted a bid that came in about $200,000 above their $1.8 million asking price from a Los Altos couple keen to raise their three daughters on a quieter street.
?From the majestic trees and the lush foliage in the front and backyards to the living room with high ceiling made of knotty pine, your home is filled with charm,? the Sastry family said in their letter. They moved in Dec. 15.
Ms. Blankenburg said her parents, avid gardeners, would have been pleased by the buyers? fondness for trees. But she realizes the letter isn?t a commitment.? ?Three months from now, I may drive by and find they tore [the house] down,? she said.? Kantha Sastry said she and her husband don?t know whether they might one day tear down the 1938 home.
But some Silicon Valley brokers have seen that scenario play out before.
A few years ago, the owners of an older Los Altos home got more than 21 offers and picked the one from a woman who also submitted a love letter from her dog, said Kathy Bridgman, an Alain Pinel Realtors agent who represented the sellers.
?She won?t touch a thing,? promised the letter, signed with a paw print. ?I will be able to play in the yard.?
After closing, the buyer immediately tore down the home and built a bigger one.
From the wsj.com
Source: http://www.bubbleinfo.com/2013/01/15/real-estate-love-letters/
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