With Arizona’s hypercompetitive real estate market, it’s not uncommon to have potential buyers have a desire to write a personal message to sellers with the hope it would encourage them to accept their bid above others.
While listing agents do not have the authority to withhold such a letter, nor does a buyer’s agent violate the law by simply delivering one, these letters could reveal the personal information or characteristics of a buyer as a basis for a seller’s decision to accept or reject the offer.
The federal Fair Housing Act makes it illegal to discriminate in the sale of real estate on the basis of a person’s:
- Handicap (disability)
- Familial status (includes children under the age of 18 living with parents and legal guardians and pregnant women)
- National origin
According to the National Association of REALTORS®, 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.
- Remind your clients that their decision to accept or reject an offer should be based on objective criteria only.
- If your 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.
Arizona REALTOR® and 2020 Frank Dickens Excellence in Education Award winner Mandy Neat says:
I tell agents that ‘love letters’ can pose a problem. I also breakdown to them on why… However, how do we stop a buyer from wanting to tell their own story? Also, how can we mandate brokers to not allow this if they do not know until there is a problem?
One item I have been teaching is on the listing side… As your listing agent, I am obligated to send you all items that are sent to me. However, for you to choose the offer terms best for you, I would suggest not opening any personal letters from the buyer. This will keep you objective and avoid potential fair housing violations based on the information provided.
A letter of introduction could provide the seller with information that might lead the seller to reject an offer on the basis of a protected class. Therefore, the best business practice would be to refrain from asking for letters of introduction if they were not offered voluntarily by a buyer.