Although Valentine’s day (or Single Awareness Day, as some have called it, including myself in past years) has come and gone, love is still in the air. Not in the form of Victoria’s Secret (which has not been a secret well kept) or Russell Stover chocolates from the Walmart, but certainly in the form of love letters.
In the world of real estate, love letters are frequent occurrences. These are not letters written between flirty agents, nor are they fan letters written to the legion of hosts on HGTV. These are letters written by buyers, directly to sellers. These letters are often included with a purchase contract, one of many that a seller will likely receive in this market of minimal inventory, in an attempt to coerce the seller to pick their offer over the myriad of other offers received.
Specifics of these letters run the gamut. Many include pictures of the potential buyers, an explanation of why this home would be “the perfect fit,” what a rough road it has been for them to get to this point, and why their offer should be chosen over anyone else. In fact, this is happening so frequently in our industry right now, there are a variety of online templates that can be used for said love letters. I actually looked over a few of them for “fun.” I’m glad I did, just so I can offer my unsolicited opinion: bad Idea. Not only is using a template to compose a heartfelt letter a bad idea (imagine receiving a letter from your significant other written from a template), but writing one, in general, is a bad idea (not to a significant other, but to the seller of a home).
We have probably all heard stories of how the letter was the cause for winning the bid, but this is a rare case indeed. In fact, I have had sellers refuse to read letters because they felt it was somewhat “manipulating.” Personally, I will not read any included letters. First, they are not addressed to me, but directly to the seller; second, they are often rife with fair housing violations. In fairness, I have to educate my sellers on the risk of reading these letters themselves. I also discourage my buyers from writing them. Why? Such letters are a slippery slope.
These love letters rarely address the actual property. Along with a picture of an adorable family, all wearing matching hand-stitched outfits, including the dog, these letters almost always consist of myriad of personal information about themselves, such as, “This will be a great home in which to start our family,” or “It’s such a close walk to the church,” or the famous “Our kids will love the backyard.” The running theme here is “we have so much in common, pick me!” If a buyer does happen to pick them, not necessarily because it is the highest offer, it may be that there is more than one offer that is the highest, but because they can identify with the buyer, this could, inadvertently and, most likely, unintentionally, be a fair housing violation.
As a review, the federal Fair Housing Act makes it illegal for real estate agents, sellers or any other housing-related service provider to discriminate on the basis of race, color, national origin, religion, sex, familial status or disability. Many states also include age, sexual orientation or military status as a protected class as well.
Even if the violation is unintentional, if the seller is challenged on the decision, it could result in a significant financial penalty if brought to a court of law. Writing a letter isn’t illegal, but it seems to toe the line of discouraging fair housing. Perhaps if the buyer kept the letter exclusively to the merits of the offer, it would be considered more appropriate, but doesn’t a strong offer with a prequalification letter do the same? It’s best not to skate on thin ice; the water is way too cold underneath.