How Do I Love Thee . . . Send the Love Letters to A Sweetheart, Not A Seller

Today’s market is HOT!  Really HOT.  Like a cheap romance novel HOT.  Sellers are receiving an enormous amount of attention, with multiple buyers wooing them for their homes by offering prices well over list, large due diligence fees, and yes, love letters.

Who is encouraging these love letters designed to pull at the heartstrings of the seller and lull them into accepting a particular buyer’s offer over others?  Usually the buyer agent.  Maybe the buyer has heard the letter is needed from family or friends trying to help out.  The bottom line is such letters can create a problem and are best avoided by all.

The purpose of a “love letter” is simple enough – a buyer wants to be the chosen one, and it seems reasonable enough to attempt to win their dream home by pouring out their hearts to the sellers.  However, these letters can pose serious fair housing risks as they usually contain personal information about the buyers which may result in conscious or unconscious bias in selection by the sellers. 

What does that mean?  Let’s say the buyers include a photograph or two of themselves.  Now the seller is looking at the buyers and can see their race, whether or not they have children (familial status), or whether or not they are heterosexual.    The buyers may refer to how they can’t wait to put up a Christmas tree by the fireplace – an indication of their religious beliefs.  All of these things about the buyers may form the basis of selection by the sellers.  These factors go beyond the price and terms of an offer.  The sellers may make their choice – consciously or unconsciously – based on facts about the buyers’ race, familial status or religion, all of which are protected categories under fair housing laws. 

If you are the listing agent, you should educate your sellers about the pitfalls of love letters – this type of letter opens them up to criticism and possibly to civil liability and they should not look at such letters even if they are sent directly to the sellers from the buyers.  Sellers should only be considering offers based on objective criteria – price and terms.  Your firm may have a policy against the use of such letters – if so, let your clients know that if you receive such a letter with an offer you will not be passing it on to them.   NAR recommends that no such letters be accepted as part of an MLS listing.  Document the reasons your client chose or rejected each offer.

If you are a buyer agent, your firm may also have a policy against the use of such letters.  Never recommend that a buyer prepare a love letter for the seller or tell the buyer to send such a letter directly to the sellers.  Let your buyers know the market is hot, and they should make their highest and best offer if they want to be successful.  Prepare them for the fact that, in an extremely competitive market, they will likely lose a number of properties before they find the home that was meant to be theirs. 

The key here is to protect your clients from possible harm by removing the temptation to go with a contract simply because photographs or letters tug at their hearts and instead have them choose the best offer on the table.  Love may be blind, but unconscious bias is real and sees clearly.  Keep your clients and yourself safe from any potential fair housing issues.