Love Letters or Liability Letters? Protect Your Buyers and Sellers from Fair Housing Violations

​Buyer love letters are a tactic used by some buyers in an attempt to stand out to a seller, especially in hot markets with low inventory and bidding wars.  Seemingly harmless, these letters actually raise fair housing concerns, and could open real estate professionals and their clients to fair housing violations.
To entice a seller to choose their offer, buyers sometimes write “love letters” to describe the many reasons why the seller should “pick them.” While this may seem harmless, these letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status, which could then be used, knowingly or through unconscious bias, as an unlawful basis for a seller’s decision to accept or reject an offer.
Consider where a potential buyer writes to the seller that they can picture their children running down the stairs on Christmas morning for years to come in the house. This statement not only reveals the potential buyer’s familial status, but also their religion, both of which are protected characteristics under fair housing laws.  Using protected characteristics as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act. 
If a letter is sent to the seller, it should never include pictures of the buyer or the buyer’s family. What can be done in a letter is write about the property itself or its characteristics.  For example, “We love the house’s exterior and the garden and would take good care of it.”  It is best, however, not to send a letter at all. 
Best practices to protect yourselves and your clients from fair housing liability:

• Educate your clients about the fair housing laws and the pitfalls of buyer love letters.
• Inform your clients that you will not deliver buyer love letters and advise others that no buyer love letters will be accepted as part of the MLS listing.
• Remind your clients that their decision to accept or reject an offer should be based on objective criteria only.
• If your client insists on drafting a buyer love letter, do not help your client draft or deliver it. 
• Avoid reading any love letter drafted or received by your client.
• Document all offers received and the seller’s objective reason for accepting an offer.

 
Source: National Association of Realtors