Buyer love letters are a controversial topic in the real estate industry. While many buyers feel that a letter is their best chance to win their bid, most agents oppose the practice nowadays because of the risk it can create for sellers.
The following are some of the most frequently asked questions about buyer love letters:
What are buyer love letters?
A buyer love letter is a statement written by a prospective home buyer that explains who they are and why they want to buy your home. The letters are personalized and can vary in their content, but most buyers include some background information on themselves, reasons why they love your home, and why they think you should choose their offer.
Buyers write love letters in an effort to stand out from other offers, especially in competitive real estate markets. Most sellers have some sentimental attachment to their homes, so the love letter is an appeal to emotion.
Love letters used to be fairly common in the real estate industry. Today, many real estate agents discourage their clients from writing or accepting love letters due to some potential legal pitfalls.
Why are buyer love letters risky?
Buyer love letters are risky because they could open you up to claims of housing discrimination. The Fair Housing Act bans home sellers and landlords from denying people housing based on protected statuses. Some states have additional regulations about housing discrimination, too.
The following are examples of protected statuses covered by anti-discrimination laws:
- Race
- National origin
- Religion
- Sex or gender identity
- Sexual orientation
- Familial status
- Disability
If a buyer reveals any of this personal information about themselves in their letter, someone could claim that the seller accepted or denied the offer based on their status or background.
For example, a buyer might mention in their letter that your home is located near their church. If you reject their offer, they could accuse you of discriminating against them based on their religion.
In another letter, a buyer may write about their family and how they can imagine their kids playing in the backyard. If you reject their offer and choose an offer from a child-free household, the buyer could claim that you discriminated against them for having children.
Buyers don’t typically write love letters to try to trap sellers in a discrimination lawsuit. The letters are simply intended to give them a leg up in a competitive market. However, buyers will naturally include information about themselves, their family, and their background in the letters, which creates the potential for a messy legal situation.
Are buyer love letters illegal?
Buyer letters are legal in all states. They were briefly banned in Oregon in 2021, but the law was overturned by a federal court in 2022.
There also have not been any known discrimination lawsuits filed as a result of a buyer love letter. Agents still discourage their clients from writing them, though, to err on the side of caution.
Do buyer love letters work?
Sellers don’t have to share their reasoning for why they accepted an offer, so it’s hard to know how much influence buyer love letters really have. There are plenty of stories from buyers and sellers who claim that a love letter made a difference in the decision.
However, in highly competitive markets, letters are unlikely to have much impact. If a seller receives an all-cash offer or an offer for $50,000 over the asking price, they’ll have a hard time turning it down regardless of the letters that other buyers write.
As a seller, should I accept a buyer’s letter?
It’s not illegal to write or read buyer letters, but your agent will probably discourage you from reading buyer letters because of the potential legal ramifications.
If you do choose to read a letter, read it with caution. People tend to gravitate toward others that are similar to them. Even if you don’t have any conscious prejudices, knowing about the buyer’s race, religion, or family status could impact how you feel about their offer.
Stay focused on the terms of the offer and the practical information you have available, like the closing date and contingencies. Talk through all of your offers with your agent to make sure you consider every angle.
As a buyer, should I write a letter?
If you’re in the market as a buyer, consult with your agent on whether or not you should write a letter. Your agent will probably advise you not to, but circumstances can vary from case to case.
If you do write a letter, leave out personal details. Although you may want to talk about yourself and your life to try to connect with the seller, this could put the seller in a risky position. Instead, focus on what you love about the home.
How else can I make my offer stand out?
A love letter isn’t the only way to stand out in a competitive market. There are a number of other things you can offer to win over a seller.
If you aren’t already, get pre-approved for a mortgage before you make an offer. Including your pre-approval in your offer will give the seller more confidence in the deal. You could also offer a higher earnest money deposit to show the seller you’re serious about the purchase.
Providing a flexible closing date can be another great way to strengthen your offer. If the seller needs to find a new home before closing, being flexible will be highly appreciated.
Leaving out certain contingencies can make your offer stand out, too. In highly competitive markets, buyers sometimes waive the home inspection contingency, which means they won’t back out of the sale if the inspection reveals a major defect with the house. Waiving the inspection contingency is financially risky, so you should only do this if you’re confident you can afford significant repairs.
You should always work with your real estate agent to create the strongest possible offer on a home. An experienced and trustworthy agent will know how to make an offer that’s competitive in your market yet still practical and reasonable.
The Risks vs Rewards of Buyer Love Letters
Buying and selling a home can both be emotionally taxing experiences. As a seller, you want your home to belong to someone who will continue to love and care for it like you did. As a buyer, you want to share your enthusiasm for the home with the seller.
While a letter can be a meaningful way for a buyer and seller to connect, most agents agree that the potential risks are bigger than the rewards. Housing discrimination is a serious concern, and accepting buyer love letters could lead you down a dangerous legal path. Before writing or reading a letter, talk to your agent about the benefits and drawbacks so you can make an informed decision.
