I think at this point everyone knows the real estate market is booming. It is a seller’s market like we have never seen before. The market gained momentum well before Covid-19 but as the virus ramped up, housing inventory dried up in a real estate market already desperate for more homes for sale.
There are more serious buyers than there are homes for sale in many real estate markets across the country, including mine, which encompasses northeastern Massachusetts.
As homebuyers compete amongst each other, desperate homebuyers are ready to make their offers stand out for desirable homes. We are seeing many home buyers remove home inspection contingencies, offer appraisal gap coverage, offer well over asking, etc…
Another tactic, that has been around for a long time, but is coming very prevalent in this extreme seller’s market, is for homebuyers to write love letters to the seller of the home to be submitted with their offer.
But as a seller, reading the personal letter from a home buyer can open up liability when it comes to fair housing laws.
What Is A Homebuyer Love Letter?
A homebuyer “love letter” is where a home buyer writes a heartfelt note to the home seller. In the letter, many home buyers will share personal information about themselves, their family, significant other etc… And, why their home is perfect for them and as the term implies why they love the seller’s house so much!! Often it may also include a picture of who will be living in the house.
The idea is to connect with the seller and find some common ground in hopes that the seller chooses their offer. When multiple offers are on the table and there are similar offers to choose from, the hope is the personal heartfelt letter will tip the scales in your favor.
Does a home buyer letter to seller work?
In some cases, yes, that personal connection can make your offer stand out. You can certainly gain favor with a personal letter stating why you love their home and why it is perfect for you.
In other cases, the seller will be show me the money!! And, nothing else matters.
How A Buyer Love Letter Could Create A Fair Housing Law Issue
A few years back I had a home in Haverhill MA for sale. I had over 8 offers, but two stood out and were nearly identical. Both buyers wrote love letters to include with their offer to the seller.
One was a married couple with a young baby just starting out, the other was an engaged couple looking to buy a home prior to being married. Both set of buyers included photos of themselves.
First, I would like to say the seller never saw the letters. I always recommend to my sellers not to read or have the love letters in their possession.
But, if the seller had read them, either couple could potentially stir the pot and say they were discriminated against.
The married couple could claim they were discriminated against because they had a child the unmarried couple could say they were discriminated against because they were unmarried.
On top of it, there could hve been a racial claim made since the photo made the race of the couples known.
The difficulty, is the offers were so close, it was a matter of a minor details separating the two offers.
The mere fact that the seller had this knowledge of whom the buyers were, creates a liability. Even if the seller had no bad intentions, there is a potential liability created by just having the information about a buyers race, origin, familial status, marital status, etc….
Anybody can make a fair housing claim, especially when they feel slighted, whether it is true or not.
And, defending yourself against a fair housing violation is timely and costly. The good news are Fair Housing claims because of love letters are rare. The bad news is defending a fair housing claim can be costly and emotionally draining
But, avoid the hassle to begin with and skip the letter.
Protected Classes Under Massachusetts Fair Housing Laws
Fair Housing Laws in Massachusetts covers 14 classes of people, the first seven in red are Federally protected and apply to every state across the country. The rest are state specific protected classes. Make sure you check with your state regarding who is covered by fair housing laws in your State and what the protected classes are for your state.
- National Origin
- Familial Status (i.e. children)
- Source of Income (e.g. a Section 8 voucher)
- Sexual Orientation
- Gender Identity
- Marital Status
- Veteran or Active Military Status
- Genetic Information
In my example above, a Fair Housing Claim could be made based on familial status, marital status or race if a home buyer decides to pursue a claim that their offer was not accepted because of discrimination.
Why A Letter To The Seller of Home From A Buyer Should Be Rejected?
This is where love can go bad for sellers. The love letter from a buyer can create a liability for both the real estate agent and the seller.
Remember how I just said there are personal details in the letter?
The letter can reveal, their race, origin, marital status, familial status, sexual orientation…. the list goes on and on. It can put the seller at risk of violating fair housing laws if they choose an offer based on the people rather than the strength of the offer.
The less you know about the buyers who submitted an offer on your home, the better.
Fair housing discrimination can sometimes be quite blatant, but more often than not, it is subtle and home sellers may not even be aware that their actions could be misconstrued as discrimination when it comes to fair housing laws.
The buyer’s love letter, especially in a multiple offer situation, can create a fair housing violation. If any thing about the buyer and who they are, played into your decision to choose an offer, even inadvertantly, this could create a liability to you.
Avoiding Liability From A Home Buyer’s Love Letter
Avoiding the liability is easy. Do not accept love letters from home buyers.
Tell your REALTOR you do not want to see them. Furthermore, state in the Multiple Listing Service listing that you will not accept a personal letter from the buyer to the seller.
While personal letters from homebuyers to sellers have been around forever, the hot 2021 market has seen them on the rise again. And I don’t see the housing bubble bursting anytime soon, so the trend will continue. The concern is the personal information in these letters open up homebuyers to discrimination based on Fair Housing Laws.
The letters contain personal information about whom the buyers are and can reveal that the buyer may belong to any number of protected classes. Oregon has recently addressed the issue and have actually banned the use of buyers love letters in the home buying process in hope of reducing any discrimination against homebuyer.
I will reiterate what I said before…. Choose an offer based on terms and conditions and their ability to get a mortgage and not the people. The less you know about your buyer, the better.
Is It Illegal For A Buyer To Write A Love Letter To The Home Seller?
It is not illegal for a buyer to write a personal letter to the seller to submit with their offer.
Realize your efforts may be in vain and it may not be a great idea as you could unknowingly create a liability for the seller. Listing agents and their sellers may not read them at all. There may even be an agreement between the seller and their real estate agent not to have the letters forwarded to the seller to read.
But, in no way is it illegal for a buyer to forward their letter along with an offer nor are you violating any fair housing laws. It may even work and help to get your offer accepted if the letter should get to your seller.
A Buyer Can Unwittlingy Put You In Bad Situation By Writing A Persoanl Letter To A Seller
Even if you handle yourself perfectly, a buyer may say something in their home buyer letter that you probably would be better off not knowing. Benign statement can be made that could be a future laibaility.
Statements like the ones below could be found in home buyer letters to a seller.
My daughter is a star basketball player at the local school. You now know there are children. Children are a protected class.
We can walk to our synangogue from here. The homebuyer has indicated they are religious and could even identify a certain religion. Religion is a protected class.
If a man, says my husband and I love this neighborhood…. Sexual orientation is a protected class.
We just got married and want to start a family here. Marital Status and Familial Status are protected classes.
We want to be in our first home by Christmas. Religion is a protected class.
Everyone of those statements gives you, the seller, an idea of who the buyers are and reveals what protected classes they may belong to.
In itself, it is may not present a problem. But what you say in response and what you do with that information in your head can create a problem. Discrimination of a potential buyer could be inadvertant without you even being aware. The minute you identify with someone from a protected class you open the door for potential discrimination and liabilty.
After reading a home buyer leter presented to you the seller and you think awwww…..
….they want to raise a family here….
….they are newlyweds just starting out like we were….
….the new owners will love the other same sex couple next door….
Each thought you have of a buyer relating to their protected class can open you up for a potential problem and subtely sway your decision to accept an offer based on who your buyers are and what protected class they belong to are.
State in the listing you will not be accepting homebuyer letters to the seller. Tell your agent to reject any homebuying letters and not to forward them to you if you should get any.
Fair Housing Laws Go Beyond A Buyer’s Love Letter To A Seller
A home seller needs to be aware of fair housing laws throughout the entire process of selling a home. As real estate agents, we have been trained to deal with fair housing laws. But as a home seller, it is not something you run into every day.
Unfortunately, your curiosity, with no bad intentions behind it, can be misconstrued as a violation of fair housing laws.
A prime example, there are always sellers who ask me about who showed up to an open house or a showing.
Questions like is it a family, are they older, is it a young couple, are they married, do they have kids….
These questions come up more often than not and each has the potential to create a ton of liability for the seller.
So here is the problem. By asking the question, it shows that it is important to you who your buyers are and may play into your decision-making process. But every one of those questions addresses a protected class!!
Don’t ask, the less you know the better.
An experienced agent will remind you that selling a home is not about the people, “let’s not talk about whom the potential buyers are to avoid any fair housing issues”.
Meeting Prospective Buyers
Occasionally, as a home seller, you may meet a potential buyer for your home if you come home early and a buyer is in the middle of their showing at your home or a drive by buyer stops and asks you a question.
Now this is where things can get very sticky. Don’t ask personal questions. This is where you can get in trouble. If you ask the questions from the previous section it can be viewed as fair housing violations. And don’t make any assumptions…. like the girl next to the woman in the car is her daughter, that the family is Chinese, the couple would be interested in the synagogue around the corner, etc…
As a buyer’s agent in Massachusetts, I have run into sellers that have made statements to home buyers like:
“This is a great family neighborhood” Problem- It could be understood that this neighborhood is for families only, unmarried, childless couples not welcome.
“There’s another Chinese girl, your daughter’s age, two houses down” Problem- You are implying this neighborhood is for Chinese people only. Who even said my client was Chinese in the first place!
“I want to make sure the new owner is a good fit for the neighborhood” Problem- Is you are implying the neighborhood is for a certain type of person. What if the buyer is not the right type of person.
“We can walk to our church” Problem- You are implying the neighborhood is for certain religious people and the person you may be talking to may have a disability and has difficulty walking.
“This is a great starter home for a married couple just starting out” Problem- You are implying the home is for married people only.
And, the list goes on…. Anyone of those statements canbe turned into a Fair Housing Lawsuit if you are talkingabout a protected class of people and implying the should or shouldn’t buy a specific home or in a specific neighborhood.
So, as a home seller, avoid making assumptions about who your buyer is, do not talk about people and have a general awareness of fair housing laws. The best solution is to ask the potential buyer and/or their buyers agents to direct questions to your listing agent.
If you feel compelled to answer a question, base your question on fact and specifically about the property do not include biased opinions of why or why not the home will work for a particular person and do not talk about the buyer or people who live in the area.
Choosing An Offer
I get it, some people have lived in their home for many years and have many fond memories that have been made in the home. And, you want the next owners to make those memories and love your home like you did.
Of course, if you’re a mom or parents that raised a family in the home you’re selling, you can certainly identify with a young couple starting a family in your home. You would love nothing better than your home being passed on to another family. I can’t tell you how often that is expressed to me by a home seller and I have to remind them that we don’t get to choose the next owner based on who they are.
It is violation of fair housing laws, to choose or deny a buyer based upon who they are based on the Federal and State protected classes. Especially when you are choosing or denying a home buyers offer over another potential buyer.
The only consideration should be the terms and conditions of the offer and the buyers ability to close on the home.
But to choose an offer because you liked a buyer better can open up a can of worms.
The less you know about your buyer, the farther you distance your self from any liaility concerning fair housing laws.
And that include ignoring a homebuyer letter to the seller that may include personal details you are better off not knowing. Not knowing who your buyer is in the first place will avoid any trouble down the road.
Curb your curiosity and refuse the love letters that your buyers may include with their offers.
Other Real Estate Resources
- Are emotional support animals allowed in rentals with “no pet” policies? G. Brian Davis takcles the question about Emotional Support Animals being allowed in a rental property where no pets are allowed. Find out when an ESA is allowed or not.
- The real estate market is red hot maybe even white hot in many markets. But entering a hot real estate market for first time home buyers can be especially tough. Chris Highland helps set expectations for a first time home buyer during a hot real estate market.
When Love Goes Bad! was provided by Kevin Vitali of EXIT Realty. Kevin Vitali is your Haverhill MA Realtor and can help you buy or sell your next home.
Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest including the following communities and the surrounding area including Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut. Georgetown, Groveland, Haverhill, Lawrence, Littleton, Lowell, Melrose, Merrimac, Methuen, Middleton, Newbury, Newburyport, North Andover, North Reading, Reading, Salisbury, Stoneham, Tewksbury, Tyngsborough, Wakefield, West Newbury, Westford