Neil Goradia

By: Neil Goradia

Letters to home sellers from buyers may seem innocent enough, however, they pose a very real legal threat. As a real estate professional, you must steer your clients clear of using love letters during the buying and selling process.

Useful Resources:

Here are some resources to get you started. Use these to educate yourself and to provide more context for your clients.

• Housing Discrimination Under the Fair Housing Act
• National Association of REALTORS®: Love Letters or Liability Letters
• Article: How to Handle Buyer Love Letters

Why Buyers Write Love Letters to Home Sellers

In a competitive market like the one we’ve seen since the onslaught of the pandemic, homebuyers find themselves up against multiple bids and sometimes losing out on the homes they want to buy. They started looking for ways to stand out to the seller. One way was to write letters to sellers to convince the seller to pick them. Yes, the market is shifting, but in some locations, competition remains high, and love letters are still enticing for buyers.

Essentially, a buyer will include a letter with their offer hoping to increase their chances of buying the property. The letter may tell the seller why they love the property and how they would treat the home. The buyer might also provide details of their family, and sometimes even photos to improve the chances of their offer being accepted.

I would be surprised if you have not come across a love letter from a buyer. I am a real estate professional in Denver, CO and in my market, these love letters to home sellers from buyers have become increasingly popular over the last 5-7 years. Certainly, as the Denver real estate market heated up and buyers looked for new and unique ways to have their offers accepted, letters to sellers from buyers became more popular.

At first, a cute and thought-provoking love letter from the buyer to the seller seemed innocent enough to me. When an associate of mine first talked to me about having buyers write letters to sellers I thought it was a great way to stand out from the crowd.

Did you think so too?

While I never really pushed buyers to write letters to home sellers to try to convince them to sell their house to them, I didn’t necessarily think of it as a practice to avoid, either. That is, until I had a conversation with my lawyer friend.

“The danger of presenting a letter to a seller from a buyer is that it exposes the seller to potential legal action based on the Fair Housing Act. I understand the thought behind these letters however, as an attorney I think buyers should refrain, and sellers certainly not read them.” said Steve B, an attorney and member of Denver Home Solutions. 

The Danger of Letters to Home Sellers From Buyers

Letters to home sellers from buyers present a huge legal risk for the seller. The risk of these simple heartfelt letters from buyers enticing sellers to choose their offer stems from the Fair Housing Act, which is designed to eliminate discrimination.  As a love letter provides personal information about the buyer it could easily sway a seller’s decision.

The National Association of REALTORS® gives an example of a family around a Christmas tree. This simple photo can convey religion, the size of the family, race and several other factors about the people in the photo. Consciously or subconsciously, people might use this information to decide whether to pick the buyer. Even if the seller believes themselves to be completely unbiased, a photo and a heartfelt note make it difficult to be objective.

How Agents Should Treat Love Letters to Sellers

If you have a buyer that asks about writing a letter to the seller, you can simply explain the situation. You can also provide them with links to resources, so the buyer understands that you are advising against love letters from an informed place with their best interest in mind.

If you are an agent representing a buyer:

1. Get ahead of the game and let buyers know about love letters and the danger they pose in a casual conversation.
2. Make it clear that love letters could cause legal issues and that you’re looking out for their best interest. Provide resources and information on the Fair Housing Act and site examples if you have them.
3. Don’t help buyers write love letters.

If you are representing a seller:

1. Do not accept any love letters from the buyer’s agent and refer them to the Fair Housing Act.
2. Teach your seller to treat the sale of their home as a business transaction. Objectify the entire process, and have them pick an offer based on time to close, down payments, earnest money and the sales price.

If you have a buyer or seller that insists on sending or receiving letters, advise them to seek legal counsel and document what you did. Sellers of homes are the ones that are most open to legal consequences, so be doubly sure to document your advice and involvement in the process.

Banning Love Letters was Deemed Unconstitutional. What Now?

A judge in Oregon recently ruled that a ban on love letters is unconstitutional, but that doesn’t change the fact that love letters pose a liability issue to sellers. One might argue that not accepting them could open you up to a lawsuit. After all, love letters are not illegal. So how should we proceed?

If you are representing a buyer:

1. Coach your buyer to focus on the house and its features.
2. Ask that the buyer not include any personal details covered by the Fair Housing Act, such as race, color, religion or sex. Full list here.

If you are representing a seller:

Suggest they document their criteria for selling before they receive any offers. This can be a quick and easy task. For example, they could write an email stating that they will choose an offer based on the amount, the time to close and the earnest money. They could even document if they were willing to wait for multiple offers. As long as they follow the documented procedure and the procedure doesn’t include any breaches of the Fair Housing Act, they should be ok.

All of these extra steps might seem like a hassle. Still, they are completely necessary to ensure you and your clients are protected and not in potential violation of fair housing regulations.

I would love to hear what you all think about love letters from sellers to buyers. Are you seeing them in your area? Do you have similar concerns? Where do you think this will go next?