Make your home offer stand out with a handwritten love letter (© Ruth Jenkinson/Dorling Kindersley/Getty Images)

© Ruth Jenkinson/Dorling Kindersley/Getty Images

Just as temperatures are starting to rise, so are multiple offers on prime properties in some recovering markets. To stand out from the pack, an increasing number of buyers are taking the old-fashioned approach and penning a love letter to sellers telling them what they adore about the house and why they are the best suitor to end up with it.

In this installment of Buying Advice, we'll look at what buyers stand to gain by writing these letters and what the letters should contain to be most persuasive.

We'll also check in with the latest housing numbers and answer a reader's question about how to find first-time homebuyer assistance.

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Courting the owner
In this digital age, there's something nice about getting a personal letter written (or even typed out) on paper, even if it comes from someone you are doing business with. That's why an increasing number of sellers are writing letters to owners when competition for properties gets stiff — especially given that bids considered too high often won't meet lenders' appraisal rules.

Anna and Buzz Hays recently wrote a letter to shore up their bid on a midcentury home in a coveted Glendale, Calif., neighborhood. "I thought about it and said, 'I might not have all cash to pay for the house, but I do have writing ability and I can use that,'" says Anna Hays, a teen-fiction writer.

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She described what she liked about the home, including how well-maintained it was, the beautiful rock waterfall by the pool, the friendly neighbors and the "nature and calm" in the wooded neighborhood that surrounded it. She also included a few lines highlighting her and her husband's résumés and assured the couple selling their home of 15 years that they would take steps to make its pool safe for their school-age twins.

The strategy worked. Hays and her husband beat out the other three offers and recently closed on the property. "They called me when the bid was accepted and said it was because of the letter," she says.

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Is this tactic a good way to set your bid apart from the pack, or is it a waste of time? We asked agents what they thought about buyer letters and what they would include if they wrote one. Most said a sincere letter was worth a shot for a standard sale, not a bank-owned property.

"I have seen them work miracles with sellers, and I have seen sellers put them aside and move on with another offer," says Ofe Polack, an agent with Coldwell Banker in Manchester, N.H. "Like everything else in life, it takes two to tango."

However, agents caution that buyers should never go rogue and submit a letter without their agent's knowledge. "Buyers are never to have direct communication with sellers," says San Diego agent Kim Drusch of Century 21 Award. She says she often submits photos and background stories of the family she is working with, if she thinks the seller would be swayed by the information.

"A traditional seller typically is devoted to the home they raised their family in," Drusch says. "They, of course, are vested in who takes over 'their' house from this point forward."

Buyers should convey several things in a letter, including:

  • Specific features or things that they like about the house and the community. "I've … had sellers read letters and the compliments made them so happy that they've chosen lower offers because of the letter. But not much lower," says Joseph Moore, an agent with Bridge Realty in Minneapolis.
  • How long they've been looking.
  • A little bit about themselves, including names and ages of any kids. "If the buyers knows that the seller raised a family in the house, I would appeal to those emotions," Polack says.
  • Anything that speaks to their purchasing power or creditworthiness.
  • A commitment to the house and a willingness to do "whatever it takes" to land it.
  • Anything else buyer and seller have in common.

Keep it short and sweet and don't give so many compliments that the sellers think they've underpriced the home, agents say. And don't expect your prose to bridge a $30,000 gap between your offer and the next bidder's.

"If you're sincere," Hays says. "I don't see how you can go wrong,"

(Buyers: Have you been turned down for a home loan? Has a home deal fallen through because of a problem with financing? Please email your stories to msnrealestate@microsoft.com. They will be considered for an upcoming column.)

Housing market update
Existing-home sales edged down 2.6% to 4.48 million in March from 4.6 million in February. But that number was up 5.2% from March 2011.

Lawrence Yun, chief economist for the National Association of Realtors, insists — as many other economists now do — that a recovery is "happening" despite the March dip.

New-home sales came in better than expected and values are firming up.

The national median existing-home price of $163,800 in March was 2.5% higher than in March 2011.

The NAR's Pending Home Sales Index, which measures contract signings rather than closings, rose 4.1% in March to 101.4 from 97.4 in February. It is 12.8% higher than it was in March 2011, an encouraging sign; economists say the housing market is finally shaking off the winter doldrums.

What's your home worth?

This rosy outlook was affirmed by Zillow's first-quarter Real Estate Market Report, which showed home values rising 0.5% from February to March. That was the largest monthly increase since May 2006, before the housing bubble burst. Zillow projects a 0.4% price decline nationally this year.

However, Zillow says 19 of the 30 markets it covers will reach a bottom in home values in 2012, or have already reached one.

The biggest increases in value in the next 12 months are expected in Phoenix; Tampa, Fla., and Miami-Fort Lauderdale. Atlanta and Chicago are projected to experience more significant price declines as their markets continue to languish.

"For people who have been waiting to time their home purchase close to the market bottom, it's time to start shopping," Zillow chief economist Stan Humphries says.

A reader asks: Funds for first-timers?
Buying Advice received a question from Deana in New York, who wondered what was the best way to find programs that will help first-time homebuyers with their down payment.

Increasingly, real-estate experts say, it's just a matter of typing "first-time homebuyer down-payment assistance" and your state and city into a search engine to find programs.

"There are so many people searching for those terms that they have themselves become a keyword," says Ilyce Glink, publisher of ThinkGlink and author of "Buy, Close, Move In!"

One of the most reliable ways for first-time homebuyers to find help is to turn to one of the housing nonprofits approved by the Department of Housing and Urban Development, as well as those funded by community-development block grants and municipalities and foundations, says Marietta Rodriguez, director of homeownership and lending at NeighborWorks America, a network of nonprofit community-development and housing counselors.

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"They can help you figure out if you are mortgage-ready and what finance and support services are available," she says. In some cases, pre-purchase counseling from one of these agencies may be required in order to get help with a down payment.

One thing to watch out for, Glink says, are scam websites that purport to have first-time homebuyer down-payment programs, but are in fact either lead-generation sites or scam operations looking to access your valuable personal information by posting phony aid applications online.

Rodriguez says many of these sites will even charge applicants for information that is available for free.

While you might have to fill out a form online, it's best to make a call and confirm that the nonprofit housing agency that claims to be offering it really is.

And, Rodriguez says, given how confusing and dense the information on these programs is online — with pages and pages of links — it might be easier to talk to a knowledgeable person who can figure out quickly what you qualify for.

Questions? Comments? Do you have a question about buying or a suggestion for a future topic in this column? Submit either in the comments section below or on Facebook, or email msnrealestate@microsoft.com. Brief questions have the best chance of being selected.