Are you a buyer competing for a property in today’s market? If you are, you probably know that sharing something personal about yourself in a cover letter to the seller might prove beneficial. After all, most sellers want to know something about the people who are buying their home, right? Isn’t it important for Sellers to know that their home is going to someone who will love it the way they do? Someone who may have some things in common with them? In most cases, the answer is “yes.”
What is a Love Letter to a Seller?
Sellers often do care about who is buying their property and cover letters (aka “love letters) that accompany a purchase contract can be effective. Very effective. But, are they appropriate? Are some buyers losing out because they don’t present love letters? Or, have you lost out because your love letter didn’t resonate with the Seller? Or, maybe just not as much as someone else’s love letter? Case in point — I was working with a senior couple recently. They were strong candidates for a home — mature buyers with excellent credit scores and strong cash down. But, they missed out multiple times on properties before finally securing a property.
Potential for Discrimination?
Now, there could be many reasons why a seller chose a contract other than theirs, but I can’t help but wonder if buyer profile played some small part in the seller decision-making. Maybe it did, maybe it didn’t, but I’m wondering. And, therein lies the problem. If you lose out on a home due to any reason other than price and terms, do you wonder why? As a buyer, is there potential for you to feel as if you were discriminated against? As a seller, are you going down a slippery slope by giving too much credence to a buyer’s love letter? I do not believe that the majority of sellers purposefully discriminate, but even unconscious bias can be a cause for concern.
Controversy over “love letters” from homebuyers to sellers has been growing. In fact, Oregon has become the first state to require real estate agents to reject love letters from homebuyers. In Hawaii, there is no such law, but we may be headed in that direction. The concern over the practice of providing love letters is valid. Love letters are intended to paint a favorable picture of the buyer. But, they may actually be a catalyst for a case against a seller for discrimination.
Making Your Offer Stand Out
In this competitive market, a buyer’s attempt to win the seller over is completely understandable. With multiple offers in play, there is overwhelming pressure on buyers to make their offer stand out. Assuming competing offers are similar when it comes to price and terms, a good love letter might be the deciding factor for a seller.
But, even if letters are effective, are they worth the risk? What about the potential pitfalls they create? For example, if you present a love letter to a seller describing your familial status, could you be causing a seller to consciously or unconsciously violate Fair Housing laws? If a seller chooses your offer because you have children over a competing buyer who does not have children, has discrimination based on familial discrimination occurred? The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, and disability.
Stick to Fair Housing Laws
The jury is still out as it pertains to love letters in Hawaii. But, as a buyer, if you choose to write a cover letter to a seller, consider sticking to objective criteria that adheres to federal and state Fair Housing laws. Talk about the features you like in the home. Share your financial strength as a buyer. Provide assurances about your ability to perform. Discuss your motivation to close in a timely fashion. But, stay away from descriptions and phrases that are protected under fair housing laws. And, make sure that you don’t put yourself, your agent, or the seller in a compromised position when it comes to adhering to fair housing. If you are a seller in receipt of a love letter, do your best to make a decision based on objective facts.
Adhering to fair housing laws and safe practices provides a level playing field and a fair process for all parties.