If you are a buyer in today’s market, it may seem like an uphill battle for you. It’s been a seller’s market for quite some time now. This is mainly due to the lack of inventory of homes for sale and that home values are rising. Many buyers lose out on homes they put offers on more than once before finally having an offer accepted. Buyers are "pulling every trick out of the hat" to get their offers accepted. They are offering considerably above list price, buying “as is,” waiving inspections, using appraisal gap riders and more. Many buyers are writing personal letters to sellers, sometimes referred to as "love letters," to make their offers stand out and get their offers accepted. If you are a buyer who is writing "love letters," you may not realize that they may actually hurt you more than they help you.
Perceived Value for the Home Buyer
Buyers who write "love letters" to sellers think the letters are actually helping them stand out, get noticed and have a better chance of getting their offer accepted. This may not be the case. The National Association of Realtors actually published an article called Love Letters or Liability Letters? citing ways these letters may actually be causing liability with fair housing concerns.
Liability and Fair Housing Concerns
Sometimes "love letters" can contain personal information that pose fair housing liabilities. Their letters may contain information relating to your race, religion, age, sex and familial status. Even though you may have good intentions, you may be unconsciously causing the sellers to use an unlawful basis for choosing your offer. You may also be putting your real estate agent at risk of violating the Fair Housing Act.
How They Can Adversely Affect Negotiations
"Love letters" may also adversely affect your negotiation strategy. You do not want to disclose any information that will hinder your negotiation strength. For example, do not tell the sellers that you really need to close by a certain date. They may use this to get a higher price out of you. Do not tell sellers that you just got promoted and you are making considerably more money, or they may think they can get a higher price from you as well.
Are "Love Letters" Legal?
Up until recently, buyers' "love letters" were legal in 49 states. Oregon was the only state that banned them. However, in an article on usnews.com by the Associated Press in Portland, Oregon on March 7, 2022, "A federal judge last week issued a preliminary injunction blocking Oregon's ban on so-called real estate "love letters." The judge said that the ban violates the First Amendment of the U.S. Constitution by restricting free speech.
If you insist on writing a "love letter," remember to write one in a way that will actually help you. You may wish to compliment and praise the seller's home in your letter. You may wish to simply state that you can "envision living in their beautiful home." Just don’t give out any information that could hurt your negotiations. Be sure what you write is ethical and remains within the boundaries of the Fair Housing Act. Discuss your homebuying strategies with your real estate agent. Even though the competition is fierce and home values are rising, before you know it, you’ll have a new house to call home.