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Including a Love Letter with a Real Estate Bid May Expose Brokers to Discrimination Lawsuits

November 17, 2021
July 28, 2021

As the real estate market continues its strong showing, many frustrated buyers are turning to “love letters” in an attempt to sway sellers into taking their offer over other competing bids. While pulling at the heartstrings of a seller may seem like a harmless move, agents for both the buyer and seller run the risk of potential lawsuits for discrimination under the Federal Fair Housing Act. The Federal Fair Housing Act prohibits discrimination based on an individual's race, color, national origin, religion, sex, familial status, and disability. If it appears that information disclosed within a "love letter" caused a seller to reject or select one buyer over another, disaster could ensue for everyone involved in the transaction.

Typical buyer offers normally include the closing date, the amount of the down payment, and the price offered for the home. Enclosing a separate document from the potential buyer that includes romance language like “the house is within walking distance of our church,” or “my wife will be able to use her wheelchair and not have to worry about going down the steps without assistance; as a fellow Atlantean, you know we will take good care of the house for many years” and  “this was the first neighborhood we visited where our multicultural family felt welcomed” could influence a seller to use protected characteristics as a reason to reject or accept an offer, which would violate the Fair Housing Act. Agents for both buyers and sellers would do well to avoid such situations for themselves and their clients.

For buyer's agents, state up front that you will not include "love letter" communications with any offer you submit. If necessary, write to your clients stating your position. If the client insists, educate them in writing on the Fair Housing Market Act and its purpose. Do not read, draft, edit, or help to send any “love letter” communications for your client to the seller.

For seller’s agents, state in the MLS description for the property that personal communications from potential buyers will not be accepted or read. If a letter is received, promptly write to the buyer’s agent telling them that the communication was not read and that it is being returned. Remind your clients that their acceptance or rejection of an offer should not be based on any information that they may have learned about the buyer(s) as individuals. If there are multiple offers, consider creating an ‘offers received chart’ for your clients. The chart should only state the closing date, the down payment amount, and the price being offered for each potential buyer.

While no one enjoys losing out on their potential dream home, it is better to have loved and lost than to get sued for federal housing discrimination.