Writing a love letter may help you win a bidding war

No, I don’t mean a bidding war over a guy or girl you love – I mean to buy a house! A love letter, traditionally, may be used for wooing a potential soulmate, but it has its place in the real estate world, too. Especially in the Bay Area, where house prices are absurdly high and most people sell their homes for a significant over-asking price, a letter to the homeowner with a personal touch can make all the difference.

Image result for letter

Take this article, for example, which details the story of a local business owner who “won” the rights to buying an adorable cottage against 10 other bidders, despite her offer not being the highest. Of the 11 offers the homeowner received, 8 sent personal letters, and she believed the subject of this article wrote the most touching one. She connected with the homeowner by writing about her dog, who she’d always promised a big yard too and who was nearing the end of its life when she bought.

The seller is quoted as saying that she felt like she knew the buyer before even meeting her, so it put her over the top, even for a slight discount on the final price. I think this is a really awesome, effective tool that can make all the difference in the world! I highly encourage any of my clients to do something similar and write a personal letter to a seller, in the hopes that connecting with them on a personal level will help get the offer accepted.

Image result for got keys to house

It may be a bit of a corny strategy, but when you’re pursuing the house of your dreams, why wouldn’t you go all out to get it? It should be pretty easy to dig up a little information on the seller (favorite sports team, pets, etc.) and you can utilize that to your advantage. I know if I were selling my house and a buyer told me they also love skiing and had fostered Weimaraners, I’d probably put that person right at the top of my list!

The Tax Benefits of Home Ownership

money in pocketMoney Management 101: Buying a home, especially in California, has its benefits from a tax perspective – buyers can deduct their mortgage interest and property taxes from their income after they purchase. For buyers in high tax brackets, these savings can amount to more than $1,000 per month in high-end markets.

Why is this benefit important? For payment-sensitive renters who are considering a first-time purchase and are nervous about their housing payment jumping from $2,500 in rent to $4,000 (for PITI = Principle, Interest, Taxes & Insurance), it may be enough to make them change their mind or scare them into being a renter for life.

What most people don’t realize or most lenders and realtors don’t emphasize (or bother pointing out at all), is that IRSbuyers can recognize their tax benefit right after purchasing by increasing their allowances or exemptions on their IRS W4 form and giving it to their HR contact. By increasing the number of exemptions – because now you own a home and can write off the interest – you don’t need to withhold as much money for the IRS. This allows the new home owner to maximize their take-home pay with each check and mitigate the pain that results from the increased home payment.

Buyers should consult with a CPA or tax planner to figure out their optimal number of exemptions. The idea is that on April 15th, you don’t pay any additional money or you don’t receive a refund from the IRS. If buyers are already claiming a handful of exemptions, then it is unlikely this benefit will give much in the form of extra income flowing into their paychecks.

Some information in this blog taken from JVM Lenders Daily Comments.