In the current economic climate, buying real estate is fiercely competitive, and we have all heard and read stories of buyers making dozens of offers only to lose their dream home again and again to all-cash investors. This is understandably frustrating, so it makes sense that buyers would look for any possible advantage that would make their offer stand out from the many others each seller likely receives.
Recently I have noticed a number of participants in the /r/RealEstate and /r/realestateinvesting subreddits suggesting that buyers should write a “love letter” to their prospective sellers to gain a competitive advantage. For those not familiar, a “love letter” is a note from the buyer that accompanies a buyer’s offer, and is designed to tug on the heartstrings of the sellers – through flattery sometimes, but also often through sharing the buyer’s personal details, family situation, background, religion, etc.
Imagine receiving a letter as a seller that included the following snippet:
“My wife and I are first-generation immigrants from Nicaragua. We have two small children, one of whom has autism, and my wife is pregnant with our third. We don’t make very much money, but thanks to the VA loan program, we’re hoping to start a new life here in your beautiful community. God bless you for considering our offer!”
It’s easy to imagine how it would be appealing to sell to this family – you might assume they’re good people, hard working, supporting a growing family, disadvantaged by circumstance outside their control but surviving and thriving anyway. You might think you’d be doing a good deed by accepting their offer, even if it isn’t the highest one you received or the most advantageous logistically.
However, considering these factors contributes to systemic oppression of underrepresented minority homeownership and is illegal in the United States.
Everyone engaging in a real estate transaction should at a minimum be aware that according to the FHA (Fair Housing Act), sellers and renters of real estate MAY NOT CONSIDER the following categories when selecting a tenant or buyer:
Race or color National Origin Religion Sex Familial status (including children under the age of 18 living with parents or legal custodians; pregnant women and people securing custody of children under 18) Disability
I strongly encourage everyone to read and become familiar with the Civil Rights Act of 1968, not just because it introduced FHA but because it’s an important part of this country’s political and social history.
Aside from creating liability for the seller, writing a love letter also creates enormous liability for any involved real estate agent.
The National Association of Realtors (NAR) is the largest professional trade group of real estate agents in the US. They make their position on love letters absolutely clear:
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.
In addition to this statement, realtors especially should be aware that the NAR views any violation of the FHA as a breach of their code of ethics and that violating the NAR code of ethics in this way can lead to sanctions and loss of NAR membership.
So in brief, buyers should not write “love letters”, and here’s why:
It’s immoral, because it propagates systemic discrimination against marginalized groups – even if you think you’re “trying to help” or “not hurting anyone”. It’s selfish, because it exposes your real estate agent, your sellers, and their agent to significant liability – you are inviting them to break federal law, and expose themselves to sanctions and civil penalties (up to $16,000 on a first offense). It will make you look silly, because no competent real estate agent would deliver them. It’s a waste of the everyone’s time and emotional investment, since in the current environment a buyer would be heavily incentivized to lie anyway.
In conclusion, please stop recommending to frustrated buyers that they should write a “love letter”.