LoveLettersorLiabilityLettersBuyer “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.  Learn how to protect yourself and your clients from the potential liability related to buyer letters.

To entice a seller to choose their offer, buyers sometimes write 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 classes/characteristics under fair housing laws.  Using protected classes/characteristics as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act.

Before the next time you are faced with a buyer love letter, consider these best practices to protect yourselves and your clients from fair housing liability:

  • Educate your clients about the fair housing laws and the pitfall of buyer letters.
  • Inform your clients that you will not deliver buyer letters, and advise others that no buyer  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 criterial only
  • If your client insists on drafting a buyer letter, do not help your client draft or deliver it
  • Document all offers received and the seller’s objective reason for accepting an offer

Reprinted from National Association of Realtors “Working with Buyers, Working with Sellers, Fair Housing, Fair Housing Act”