Attaching a so-called “love letter” to your offer on a hotly contested property is often touted as a way to make your deal stand out from the competition. But you may want to think twice about doing so. And your seller may be wise to ignore your missive.
It’s not that letters to sellers don’t work. They do, especially when you are competing with several other potential buyers, according to dozens of realty agents who suggest them to their buyers.
With promises to take care of the house “just as well as you did,” make sure the gardens are tended just as carefully, or that your kids will love the place as much as theirs did, these letters tug at sellers’ heartstrings as well as their purse strings.
Some real estate associations and brokerages go so far as to offer templates and tips about just how to structure your letter. They even suggest pairing the missive with a cute little drawing of the property by one of the wannabe buyer’s kids, or maybe attaching an adorable photo of your wonderful family so the seller can get to know you a little bit better.
But there also are a couple of downsides to pouring your heart out in a “pick me, pick me” letter to the seller.
For buyers, these letters reveal that you really, really want the place -- so much so, that you are willing to list your reasons in longhand. So rather than be persuaded that you’re the buyer he wants, a seller could just as easily dig in his heels and hold out until you offer more than you wanted to pay.
Buyers might also get themselves into trouble if their intentions aren’t really to give the house the love they say they will. Say, for example, that the letter is simply a ploy to get the land, not the house, and you really intend to knock it down and replace it with a bigger, better property.
There’s probably nothing the seller can do about that other than hiss and moan a bit. But what if the seller chooses your offer over one that offered more money because he liked the looks of your family in the attached photo, and your letter was so meaningful?
In situations like that, sellers could be opening themselves up to a world of hurt in a fair housing complaint from one of the rejected “suitors.”
The Fair Housing Act prohibits discrimination based on an individual’s race, color, religion, sex, disability, family status or national origin. So consider this scenario offered by Denver real estate attorney Jon Goodman at the recent National Association of Realtors’ annual convention in Orlando:
A few weeks after you sell your house, one of the buyers who competed for it sees in the local newspaper that you sold the place for less than what he offered. Now suppose that that would-be buyer was a person of color, a “visible member of an oppressed minority,” and that they’d attached a photo to their “pick me” letter, from which you could easily tell the person’s race.
Or suppose the successful buyer belonged to your church, and the rejected one didn’t. Maybe the letter attached to the accepted offer mentioned in passing that the writer intended to attend the church down the street, and the seller just happened to go there, too.
In either case, a suit charging a violation of the Fair Housing Act lurks just around the corner, Goodman warned. “Fair Housing cases tend to go down when the market is bad, but they go up when the market is hot.”
The Colorado attorney, who describes himself as “a gladiator” for his clients, doesn’t advise buyers not to write love letters. Neither does he suggest that listing agents unilaterally keep letters from their clients.
Rather, his recommendation is to include in the listing agreement a clause that says, in effect, “pick me” letters will not be passed on to the seller. If the seller never sees the letter, he can’t get himself into trouble.
”Sellers should make their decisions for economic reasons, not because ‘this buyer is like me,’” he said. “It’s not supposed to be about black or white. It’s supposed to be about green.”
Goodman isn’t the only realty lawyer worried about love letters. So is Annie Fitzsimmons, a legal hotline attorney with the Washington Realtors organization.
In a podcast a couple of years ago, she told group members that they have no choice but to present all offers as well as “other communications” to their sellers. But the only documents sellers should consider are the written offers, and the letters from lenders saying the buyer has been approved for financing.
Fitzsimmons also advised her members to fully document the business reasons their seller chose the offer he did. Perhaps it contained the highest price, or maybe it allowed for the fastest closing date. Maybe it came with the largest amount of earnest money, or perhaps it contained no contingencies.
Whatever the reason, she said, by documenting it, there can be no ambiguities. And no one can come back later to charge you with discrimination.