How to write a winning real estate offer letter [free template]

In a competitive market, a great real estate offer letter can help grab a seller’s attention and move a buyer to the head of the pack. While writing a real estate offer letter isn’t that difficult, there are certain things a buyer should be sure to include.

Keep reading to learn why some real estate investors send offer letters to a seller, how to write a real estate offer letter, and some things to avoid including in an offer letter.

Key takeaways

• A real estate offer letter is a non-binding offer sent to a seller that outlines key deal points.
• Other terms for a real estate offer letter are Letter of Intent, Letter of Interest, and LOI.
• A real estate investor may use an offer letter to make a personal connection with a seller to stay ahead of the competition.

What is a real estate offer letter?

A real estate offer letter - also known as a Letter of Intent, Letter of Interest, or simply an LOI - is a letter written by a prospective buyer or their real estate agent in express interest in purchasing a property. 

While a real estate offer letter is non-binding, the letter may include contract or deal points such as an offer price, if the property will be financed or purchased for cash, and the desired close of escrow. 

As a rule of thumb, a real estate offer letter is written using an informal style, or even handwritten to help catch an owner’s attention. Oftentimes a real estate offer letter will include personal information about a buyer, such as how long he or she has been searching for a home and why the owner’s property is exactly what the buyer has been looking for.

Why investors use offer letters for real estate

Real estate is a people business, even for investors buying and selling rental property. An investor may spend a lot of time crunching the numbers to find a deal that makes financial sense. However, a real estate offer letter may help to get a seller emotionally involved and relate to a buyer on a more personal level. 

In today’s real estate market, it’s quite possible for a seller to receive numerous offers for a property, even if a property is an off market listing. A buyer who is willing to tell a seller a little bit about themselves may increase the odds of standing out from the pack to gain a competitive edge.

Making an emotional connection with a seller may be particularly important for a buyer trying to purchase a home that a seller has lived in as a personal residence. There are likely fond memories of children, birthdays, and holidays at home, and it may mean a lot to a seller to know that a buyer will adore the home the same way.

A real estate offer letter may also be a good tool to use if an owner has inherited a property. While there may not be the same level of emotional attachment, an heir may still like to know that a buyer will love the home the same way.

Another reason for writing an offer letter to a seller is to “test the waters,” such as when a property isn’t officially listed for sale.

How to write an offer letter to purchase a property

One of the keys to writing a great real estate offer letter is to make a winning first impression. Here are the general steps to follow to write an offer letter to a seller.

Greet the seller by name instead of with a generic “Dear Seller.” In some real estate markets, using Mr. or Ms. may be appropriate. If the home is located in a city where doing business is more relaxed, using a seller’s first name may be better.

Personal details can include items such as what a buyer does for a living, different places a buyer has lived, and why a buyer wants to purchase the seller’s home versus another listing. The reason for sharing some personal details is to paint a picture for a seller of what owning the home means to a buyer. 

This part of a real estate offer letter is used to bond with a seller. Maybe a buyer likes the kitchen, the split floor plan, or the size of the back yard. Even if a buyer is a remote real estate investor, there’s still a tremendous amount of information that can be gathered online. 

Google Maps and GIS data from a county assessor’s website may provide images of the outside of a home. An investor may even hire a real estate bird dog to discreetly take photos or drone videos of the home and surrounding neighborhood.

Now that a seller knows why a buyer wants to buy the home, the next step is to show the seller that a deal can get done. 

A buyer who is financing a purchase may wish to mention they have a preapproval letter from a lender, and also indicate how large of a down payment is being made. Buyers who are paying all cash may wish to let a seller know the funds are on hand, and that the closing date can be flexible based on the needs of the seller.

The best salespeople know how to close a deal by asking for the order. In a real estate offer letter, closing the deal includes requesting an in-person meeting or asking for an appointment to chat by phone or on a video call. End the real estate offer letter by letting a seller know their time is valuable, and thank the seller for taking the time to read the letter and for their consideration.

What to avoid in a real estate offer letter

While one of the purposes of a real estate offer letter is to personally connect with a seller, buyers may wish to be cautious of sharing too much information. Some items to leave out of a letter to a seller may include:

• Desperation or an indication that a buyer is willing to pay whatever it takes to get the home.
• Changes or planned use for the home, such as turning an owner-occupied home into a rental property or doing major remodeling.
• Politics by mentioning the campaign sign in the neighbor’s yard or a bumper sticker on a seller’s car.
• Negative aspects of a seller’s home, like how badly the carpeting needs to be replaced or an outdated kitchen and baths, might better be addressed once the home is under contract and a property inspection is done.
• Avoid sharing too many personal financial details, such as a buyer’s net worth or the number of rental properties currently owned.
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Example of a real estate offer letter

Sample Real Estate Offer Letter

Date: ______________________________________

Buyer name: ________________________________

Address: ___________________________________

City, State, Zip: ______________________________

Seller name: ________________________________

Address: ___________________________________

City, State, Zip: ______________________________

Dear [Seller’s name],

Share some personal information with the seller, such as occupation, places a buyer has lived, and reasons for wanting to buy the seller’s home.

____________________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________

Describe favorite things about the seller’s home, such as the floorplan, location of the home, or size of the back yard. Avoid including negative comments, such as outdated flooring or fixtures.

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Include financial information, such as purchase price, method of financing or purchase in cash, and amount of intended down payment, contract contingencies, and desired closing date.

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Go for the close by asking to meet the seller in person or by phone to discuss a written formal offer, and sincerely thank the seller for their consideration.

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Sincerely,

Buyer signature: __________________________________

Buyer name: _____________________________________

Phone: __________________________________________

Email: ___________________________________________

A free, fully-editable copy of this real estate offer letter may be downloaded in a Microsoft Word or Google Docs format.

Closing thoughts

A great real estate offer letter can help a buyer to stay one step ahead of the competition by creating a bond with a seller by sharing a little personal information. While an offer letter to a seller isn’t legally binding, a buyer may wish to address deal points such as purchase price, whether financing or cash will be used to purchase the home, and the favorite things about the home.

Be sure to close the deal by requesting a time to meet or speak with a seller to discuss the terms and conditions of a written sales and purchase agreement.