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Love Letters or Liability Letters?

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You may have seen language in REALTOR-to-REALTOR remarks addressing “love letters” that some buyers write to sellers, especially in a hot market like this one.  As many broker’s know, these letters can raise considerable fair housing concerns that brokerages are nipping before they become complicit in a violation. Here is NAR’s legal advice:

“To entice a seller to choose their offer, buyers sometimes write “love 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 characteristics under fair housing laws.  Using protected 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 pitfalls of buyer love letters.
  • 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.
  • Remind your clients that their decision to accept or reject an offer should be based on objective criteria only.
  • If your buyer client insists on drafting a buyer love letter, do not help your client draft or deliver it.
  • Avoid reading any love letter drafted or received by your client.
  • Document all offers received and the seller’s objective reason for accepting an offer.”

We have seen some Berkshire County brokerages using “blind” multiple offer forms to assist their sellers in making decisions that are strictly related to the terms of offers, rather than the buyers or their agents submitting them.  This is especially helpful in showing how a brokerage takes affirmative action to ensure the seller is considering only those terms that will affect their bottom line.  The contract and forms committee has been asked to consider creating a multiple offer form and we will keep you posted!