There have been past discussions on this topic that you may want to review in addition to any comments you receive here. Here’s one https://www.houzz.com/discussions/6249035/how-can-i-make-an-offer-on-a-home-that-s-not-for-sale#n=29

Thank you for the link!

In 2021 someone did that in my neighborhood. The future buyer offered the new owner $500K more than they had paid just 2 months before. They probably weren't even completely unpacked! They took the offer and moved. Future buyer way overpaid at that time, but it was great for our neighborhood as that comp boosted overall prices.

Just be prepared that they might want more than what you think is fair market value.

Chispa

While we can't overpay that much, we are willing to pay a bit more than market value. Reason being that my parents and sister and her family live in the area and we're a pretty close family. It's one of the appeals of the house. We're very aware that this is an investment property and so we're trying to take a straightforward approach rather than a heartfelt one because we're assuming this would just be a business transaction to them.

Judianna20

Do you think not mentioning a price is best? We were thinking that giving them a price would show that we're serious and not asking for a discount or only willing to pay little more than they did for the house. We don't want to be blown off as not being serious buyers.

Tell them:

• Your family lives nearby thus you're interested
• You understand it was a recent purchase
• You'll pay all closing costs and pay more than the June purchase price. Don't mention an exact number.

Ignore the investment, the grass, the # of tourists over the summer, etc.

Not an accountant, but since it's an investment they would pay capital gains in most instances. They can defer capital gains if they do a 1031 exchange.

I get these letters all the time, so wanted to share my perspective. If you write something too vague, it probably will get tossed, I get atleast one a week even in todays cooling market, but our house is in a desirable area. I have a piece of land i bought last year and same thing, so many unsolicited offers. I once engaged with one of these and it went nowhere, so now when i see those letters, they go straight to the recycle bin. Not saying that it will be case, but there is the risk. So the more specific you can be (not saying you need to put a definitive number, maybe a range?), you have a better chance of getting noticed. Your market may be completely different, but wanted to chime in since i get a lot of letter, some including a cute family picture etc.

Good luck!

I also get a lot of requests to sell my home. I think most are Flippers looking to make a buck even tho’ they claim to be a family and want/need my house. They all go in the circular file. I don’t know how to do it, but you need to make your letter sound real and not a lie by someone commercial.

I’d have my real estate agent send my best offer to their real estate agent (July isn’t that long ago, they still know how to easily reach them and might be still working together on other deals) to present to them. As these are the two parties that most of the buying/selling conversation goes through, it’ll be taken more seriously than a random letter in the mail.

So the house was never on the market and the sale was private, which isn't uncommon for this area, so we unfortunately don't have an agent who was involved to contact. 

And we definitely want to avoid being thrown out or filed away as we're very serious. I don't think the "we're a nice family who needs your house" approach would work as this looks like purely an investment property to them. Plus, when my parents sold their last house, they had a couple write a cloyingly sweet letter about how they needed and wanted their house followed by a subpar offer and all the letter did was completely turn them off.

While we're not independently wealthy or anything like that, getting the house would mean a great deal to us, and so we're willing to go a little above and beyond what one would do to secure a typical house on the market with an average bid. I'm just not sure how to communicate that without sounding mushy or giving away too much information. The couple who owns it also looks to be about our age (30s) and I think that makes the situation a little harder to approach.

I get letters too, and toss them. I have no interest in moving right now. If you don’t put a number in the letter (with an expiration date) they will toss the letter.

I agree. I get letters and toss them without a number. Your offer needs to be high enough to pay for their capital gains plus a decent profit or it is too much trouble

Agree with rtpaige. You say this is an investment property for them so obviously they’re interested in a profit. Capital gains is going to be the killer for you - you have to make your bid high enough to be attractive to them.

Or, wait a while till capital gains won’t be such an issue and/or it becomes apparent that the property is not earning the profit they were expecting.

I get these letters all the time, also. They are more meaningful when a dollar amount is included. However, keep in mind that if it’s an investment property the owners probably need to hang on to it for two years before exchanging it for a new property (assuming they want to do a 1031 exchange). So it may be too “early” for them to sell to you. Keeping that in mind you may suggest that you would lease it for the remainder of that time and purchase it in June 2024. You would want an attorney to draft the agreement if they agree to that, because a lot can happen in 18 months. Also, with interest rates increasing over the last few months, the price they paid in June is probably more than most people would pay for it now, so a premium may not be necessary. Ask a realtor to help you negotiate if you’re not comfortable coming up with a price. They should have a lot of information about the current market that you don’t have access to.

I had completely forgot about capital gains tax. Ugh.

Renting/leasing to own is a palatable idea. Thanks for the recommendation!

I don't know about other areas, but in our area most people who have or want to have a thriving short-term rental keep the outside and inside pretty neat and tidy looking. Since they've bought this house it has been looking unkempt and messy which makes us wonder if they've overextended themselves. Also, it seems that they've opened and closed, been in compliance and out of compliance with several llcs (all with property esque names) and that makes us think that maybe their short-term rental goals aren't going as planned. 

Weirdly enough, prices are slowing around here but aren't dropping too quickly quite yet. A comparable house in the same neighborhood and with the same amenities and square footage just sold for almost 70k over what it sold for a year and a half ago, which would also be around 70k more than what they paid for their house in June.

@Nicole Shorts - There are likely few capital gains issues. This is an investment property and you implied that the owners have several properties they are using for AirBNB's. If that is case, then they likely know about (1031) like kind exchanges, which allow you to change investment properties to other investment properties and defer the capital gains until the new property is sold without a 1031.

If they are experienced with investment properties they know about 1031's. If they don't then surely they are smart enough to call their local tax professional if they are interested in selling.

----

I ignore every version of the, "I am interested in discussing your property" letter. People who are interested in purchasing one of my properties make offers. It isn't a negotiation where we discuss what I am willing to sell the house for... if I was interested in doing that, I would have listed the house for sale and entertained offers from everyone.

So I recommend that you make an offer in a letter and hope they accept. Almost everyone in your situation overpays a bit, but that is the price of getting the perfect house when it isn't even for sale. Rarely will you be able to find the cheapest amount they are willing to pay, so don't try.

Furthermore, it isn't usually beneficial to make offers like this without an amount. You are then letting the sellers have discussions about selling the home by imagining how bad you want it and how much you might be willing to pay. There is too much chance for them to create a fantasy of hitting the jackpot.

I don't understand why you would want to make an offer without doing further homework. What are you going to do with your present home? Do you need the proceeds of the sale of your house to buy the new one? Do you have a buyer waiting in the wings? If not, do you have the cash ready? If not, have you received an approval letter from a lender? Do you know the market value of your house? Do you know the market value of their house? Do you even know the condition of their property? Would it pass a home inspection? Will your home pass a home inspection?

To make this work, you must be on top of your game. Do your homework; don't make assumptions on their financial status. This may not be their only rental property. This could be their business. House(s) in an LLC?

Anyone can write a letter and throw numbers around. That is not a legitimate offer. I could write you a letter today and say, "hey, I want to buy your house. I will give you $500,000.00 more than its worth."

@judianna20

We've been thinking about this for a few months and have already resesrched and figured out most of the questions you've posed. My conundrum is about how to approach these people in a way that's friendly yet demonstrates our seriousness and ability to buy their house.

My speculations on their financial position are only to demonstrate that I think they may be open to a transaction. And I realize that speculations are just speculations and the reality of the situation could be entirely different from those guesses I'm making. Ultimately, the decision to even interact with us is in their hands. I'm just trying to figure out the most advantageous way to approach the situation. 

@Bry911

Thanks for your advice. I think your logic makes sense. We want to present the strongest offer we can without overextending ourselves - we definitely have a ceiling. We know we may risk overpaying, but as long as we're not getting entirely gouged we'd be okay with it because the house and the location are worth it to us.

I understand. Just my opinion not to include an offer in the letter until you get a feel for their position. And, if they say yes, you need to be ready to pounce.

Definitely a word of advice...don't share your idea with any of the other neighbors. You might put a bee in their bonnet.

Judianna20

Thanks for the advice. We know this is something of a hail Mary. It would be fantastic if it worked out, but we're fully prepared for it not to. I guess we'll have to wait and see.

Have your family and a local realtor start networking to find any other property that might be for sale, but not listed. If you have roots in this community, you need to take advantage of that.

One realtor in my community regularly sells houses that were never on the market. I would say 60% of his sales happen that way and he usually get the selling and buying commission. All based on his long term relationships in the community.