There are many questions about the use of so-called “buyer love letters” and the legal and ethical issues they can create. Buyer love letters are letters buyers use to attach to their offer or mail to the sellers describing themselves and their appreciation for the house in the hope that the sellers will be moved by their words to accept their offer. They are used frequently in high demand, low supply markets.
The overarching recommendation from the Idaho Real Estate Commission (IREC), National Association of REALTORS® (NAR), Idaho REALTORS® (IR), and Boise Regional REALTORS® (BRR) is that the use of such letters is discouraged, especially as they often reference protected classes under the Fair Housing Act, which include race, color, religion, sex, disability, familial status, or national origin. By introducing these letters into the transaction, it puts the seller at risk of violating the Fair Housing Act should they make decisions — even unintentionally — based on information related to a protected.
What is a “buyer love letter” and why are people using them?
IREC Chair Mike Gamblin explains in the article, “Multiple Offers, Offer Expiration Deadlines and Buyer Love Letters”:
“This phenomenon is growing as competition amongst buyers grows more intense. A buyer ‘Love Letter’ is a personal note or letter the buyer writes to compel the seller to accept their offer. It may contain information about the buyers, including family size and make up, hobbies, interests, and background information. It may explain how perfect the seller’s property is for this buyer. Personal information regarding the buyer may inadvertently cause a seller to favor, or disfavor, an offer based on protected class criteria covered by the Fair Housing Act. Using protected characteristics as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act.”
It’s competitive out there — how can I make my buyer’s offer stand out?
Help your buyer craft a strong offer that speaks for itself, not only on price but also with terms that meet the seller’s motivations. Perhaps that means offering a rent back agreement if timing is an issue or waiving certain contingencies (if your client is comfortable with this and it is in their best interest to do so). Some buyer’s agents have found success by introducing themselves and outlining their qualifications and transaction success rate, reassuring the seller and the listing agent that they will get the deal done.
If your buyer suggests submitting a “love letter,” discourage them and share that by doing so, they may be creating a situation that could lead to a violation of fair housing law. If your client insists, do not help them write or deliver it and avoid reading any love letter drafted by your client.
I’m a listing agent — how do I reduce risk for client and myself?
NAR recommends that you first educate your sellers about the fair housing laws and the pitfalls of accepting buyer love letters. Here are three excellent resources:
- Love Letters or Liability Letters? (article)
- Window to the Law: How to Handle Multiple Offers (video)
- At Home With Diversity Certification (educational course)
Your seller may say that any information contained in the letter will not influence their decision and that they would like to review them. In this case, talk to them about the concept of implicit bias, something which most people have but are unaware of, and which could inadvertently influence their decision. For more information on implicit bias, watch “Bias Override: Overcoming Barriers to Fair Housing” and take the Implicit Association Test from the Perception Institute.
Ultimately, their decision to accept or reject an offer should be based on objective criteria only. Decide with your clients that you will not accept buyer love letters at all, and consider adding something like, “no buyer love letters will be accepted or read by the sellers” under agent remarks of the MLS. (This will help buyers’ agents reinforce this with their clients, too.)
Lastly, consider documenting all offers received and the seller’s objective reasoning for accepting the offer they did and why the others were rejected, when applicable.
What information can my seller use when deciding which offer to accept?
With multiple offers situations becoming more common in today’s competitive market, it may be overwhelming for sellers to choose one offer over another. Before the listing ever goes active, discuss with your seller their motivations and the objective criteria they will use to evaluate offers. If there is pertinent information (such as the desire to do a rent back agreement, proof of funds, etc.) with your seller’s permission, you could note those under agent remarks to help buyers craft better offers.
While not an exhaustive list, here are some criteria your seller can use when evaluating offers, and some they cannot:
What Criteria Can Sellers Use to Evaluate Offers?
| Sellers Can Consider: | Sellers CANNOT Consider: |
| • Price • Financing vs. cash • Closing date or other timelines • Contingencies requested or waived • Expected ease of transaction (for example, buyer’s agent has a record of closing 96% of transactions) | • Buyer’s race or color • Buyer’s sex, including sexual orientation and gender identity • Buyer’s religion or non-practice of one • Buyer’s disabilities • Buyer’s family status (for example, cannot prefer those without children over those with children—family composition should not be a factor) • Buyer’s national origin |
Again, the consensus is that buyer love letters should not be used as they may violate fair housing laws and put the clients and agents on both sides of the transaction at risk. Inform your clients early and often on why sharing or reviewing personal information in such a letter may be discriminatory and is a practice you will not help facilitate. Instead, counsel buyers on how to craft strong offers and educate your sellers on how to objectively evaluate offers.
This article was written in collaboration with Intermountain Fair Housing Council’s Executive Director, Zoe Ann Olson, and cites sources from the Idaho Real Estate Commission and National Association of REALTORS®.
