Buyer love letters can have fair housing violations, but should the practice be banned outright? Since these letters are currently legal, banning them doesn’t seem like an option. However, you should educate yourself about the type of information you want to include.
A number of speakers at Connect Now insisted that agents stop writing “seller love letters” to sellers because these letters often violate fair housing laws. They also advised listing agents to avoid showing any of these letters to their sellers. I disagree with both positions.
First and foremost, there is nothing illegal for a buyer to write a personal letter to the seller, even though love letters are a fair living concern. In addition, buyers’ love letters were not a problem for the federal auditors for fair living.
The real problem is not the “love letter” itself, but the type of information that you can include and not that conforms to fair living laws. Unfortunately, many of the agents who write these letters violate fair living laws.
The law on fair housing
According to the Department of Housing and Urban Development (HUD), the Fair Housing Act protects people from discrimination when renting or buying a house, taking out a mortgage, seeking housing assistance, or engaging in other housing-related activities. Extra protection apply to government-supported housing.
Who is protected?
The Fair Housing Act 1968 and amendments to the Fair Housing Act prohibit discrimination in housing based on:
- National origin
- marital status
The development of the “buyer love letter”
I began “Cover Letter” or “Prelude to Offer” training back in the late 1980s when the Los Angeles market experienced a multi-offer craze, similar to what most of the nation is experiencing today.
The cover letter was a way to set your buyers apart from the competition. This was also a way to help sellers and their listing agents determine which listing was strongest and most likely to close. The main focus was on providing the sellers with the relevant financial information they would need to make this decision.
Where ‘love letters’ violate fair housing laws
Nowadays, the focus on finance has been replaced with a more emotional orientation based on the personal characteristics of the buyer. It is these emotional pitches that often violate fair housing laws.
To illustrate this point, when I looked at over 100 “Letter to Seller” templates online, only two of them contained images of people in color, and only one related to a single person as a buyer. In addition, the descriptions of the families in the photos were all young couples with cute children, and often a dog.
The problems with the ban on letters to the seller from the buyer
Given that love letters from buyers can be fraught with fair housing violations, should the practice be completely banned? Since these letters are currently legal, a ban does not seem to be an option.
In addition, those calling for an end to all buyer letters to sellers make several unfounded assumptions:
- The listing agents / supervising brokers do not check the “love letters” before they present the offers to the seller.
- Even if the agents / supervising brokers review the letters, they cannot distinguish which letters violate the Fair Housing Act.
- If they checked the letters and found a fair housing breach, the agents / supervisory brokers would do nothing about the situation.
Challenges for listing agents
Buyer’s love letters can be particularly challenging for listing agents, especially if one letter violates fair living laws and one or more other letters do not. Specifically:
- Should the agent who made the mistake be allowed to correct it, or should this letter be rejected outright due to the fair housing violation?
- Does the listing agent even have the right to refuse to submit a buyer letter that complies with fair housing laws? Does the listing agent even have the right to make this decision since this practice is currently legal?
- How should listing agents deal with the situation where the buyer is writing the letter and it is the buyers who are violating fair housing laws?
Important points to remember
- Representing the buyer can help make your offering stand out by providing relevant financial information to the listing agent and seller.
- Adding the features the buyer likes is reasonable as long as none of the above protected classes are referenced.
- Images of buyers can be used to identify age, race, ethnicity, etc., which in turn can lead to discrimination.
- If you find yourself in a multi-offer situation, have your broker review all of the buyers’ love letters before submitting the offers to the seller. If your broker has a question, reach out to a fair living attorney or your national association legal hotline to see if there is a problem and what to do about it.
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 articles published. Find out more about their broker / manager training programs developed by women for women at BrokerageUp.com and about their new agent sales training at RealEstateCoach.com/newagent.