Today, we are covering one of our most frequently asked questions, “Should I write a love letter to the seller to include with my offer in today's market?” where you are likely competing with other buyers to get a home? We are on board with making your offer stand out when competing with other buyers, but what are the risks of submitting a letter? We will answer that question as well as highlight some issues with discrimination and fair housing in the real estate process. Residential real estate has a complex history with discrimination, and we want you to understand how the rules that are in place today came to be. Let’s get into it!
What Is a ‘Love Letter’ To a Seller
The term love letter might feel a little silly to you when we're talking about buying and selling real estate. People just simply call it a letter sometimes, but we use the term love letter most frequently, because that's what it is when a buyer writes a letter to a seller. It's a letter that a buyer would write to accompany their offer to explain a little bit about themselves, how they envision this house becoming their home, etc. and a kind of a plea to choose their offer.
We always say pull at the heartstrings of the seller to get their attention when writing that letter.
We’re talking about this today, because we see it work all the time! We see sellers take lower offers or give your offer an edge simply because they like you. Selling is both a financial and emotional decision at the end of the day. A lot of people have a vision of the kind of person they can see living in their home. Love letters can be really helpful as a buyer to get a house! Although it is perfectly legal to submit a letter with your offer in Texas, there are some risks and it can be a touchy subject. In order why that it is it’s important to look at discrimination in real estate from the past and the rules currently set in place to protect you from discrimination.
Discrimination in Real Estate
Our broker currently recommends against submitting photos with these letters, and it's likely honestly that the letters all together will be outlawed soon. The reason being is, because it really gets into a lot of fair housing issues. We feel it’s important to discuss the history and terms you may hear being used in regards to fair housing issues.
Redlining - Meaning various services were denied to residents of a certain, often racially associated, neighborhood or community. That showed up in the banking and insurance industries, as well as many other industries where different prices were given to different neighbors or they were completely denied altogether.
Steering - Steering is a form of discrimination whereby a real estate professional influences someone's housing decision based on their race, religion, or another protected characteristic covered by the 1968 Fair Housing Act. Realtors in the past or other service providers were grouping groups of people together based on those protected classes and against their consent.
Blockbusting - This is the practice of persuading owners to sell their property cheaply, because of the fear of people of another race or class moving into the neighborhood.
The Fair Housing Act and Your Love Letter
Before the Fair Housing Act came the Civil Rights Act of 1866, which prohibited all racial discrimination in the sale or rental of a property. That was the baseline for saying there would be no more redlining, steering, or blockbusting and housing needs to be available to all races equally. The Fair Housing Act is a national law and is the one that really expanded that. You can't discriminate based on race, color, religion, sex, handicap, familial status or national origin. All of those things are covered to have an equal playing field amongst people that want to buy your home. So, you can see how this might make a love letter problematic. In that letter, you might be saying, “Hey, I am a young family of x color, practicing x religion, from x country.” The laws are a result of the past, so you can see why a letter of this nature could have a negative impact.
Upholding Fair Housing: Professionals, Sellers, and Buyers
The main responsibility lands on us as professionals first and foremost, but you as a seller or a landlord, have the responsibility not to discriminate based on race, color, religion, sex, handicap, familial status or national origin. When it comes to handicap accessibility, ADA rules don't comply with a previously built residential home and you don't have to make accommodations for a handicap; you just can't discriminate based on that.
On the flip side, as a buyer, you have the right to expect that housing will be available to you without any kind of discrimination. If the seller indicates that they chose you, because of one of these protected classes, it could be a cause for a lawsuit against them. Other ways Fair Housing pops up is when a seller says they want to live in a “good neighborhood”. You have to specify what that means for you and we will ask very specific questions to get to the bottom of that so we aren’t assuming anything on your behalf.
Making Sure Housing is Equally Available to Everyone
It's our job as realtors to continue to make sure that housing is equally available to everyone and as your agents, we continue to strive to be above bar on everything we do. At the end of the day, we represent all types of buyers and sellers, and we want to make sure that it's fair to each and every one of you.Thanks in advance for your understanding and your willingness to be educated on this topic. We want to hear which topics interest you most for blogs! Head on over to Where We Live Podcast to continue the conversation in our Facebook group, listen to our podcast and connect with us.
Until Next Time,
Brianna & Keelie