Let’s stay together: Why buyer love letters deserve a second chance

There are a lot of conflicting ideas about the buyer love letter. Some agents use them, other agents don’t and some even think it’s against the law. We’re here to dispel some of the misinformation that’s going around about the buyer love letter and explain why what you believe about this tool might be wrong.

Disclaimer: Although we have dug deep into research and done our homework on this, if you are an agent licensed under your broker, follow whatever their policy is on this and any other sensitive matters. You are required to adhere to their instructions and policies, as they are ultimately responsible for your conduct and may be held liable for any errors or omissions you make.

The buyer love letter: A powerful tool for negotiating

Let me start by saying that I’ve been teaching our coaching students to have their buyers write a “love letter” since 1993, and many attribute our training as the originators of this very effective technique. My point is that I’ve personally seen hundreds of letters used and the benefits this strategy brings. 

Most recently, in 2019, Redfin looked at data from thousands of offers made in the two years before to see what buyers did that made the most significant difference in their chances of winning a bidding war. Writing a personal letter increased the success rate for “competitive offers” by 59 percent, making it the second most helpful strategy after buying all cash. 

The buyer love letter is a great way for your buyers to get noticed and win the offer, which is why I feel so strongly that I need to clear up some of these misconceptions and give the facts, plain and simple, to calm some of these wrong beliefs. 

Why the love letter works so well

Buyer love letters affect parts of the brain that have to do with how people decide how much something is worth. Scott Huettel, a neuroscientist at Duke University, says that social and emotional factors often affect decisions about money.

Huettel and his team asked people to make decisions while they were in an MRI scanner as part of a study. They found that added economic value and human connection lit up the same part of the brain (the temporoparietal junction), suggesting that money and human connection play a big role in our decisions.

But unfortunately, there are people in our field who have given the wrong information to agents and brokers and said scary things like, “The buyer love letter is a violation against fair housing. It can cause you to lose your license. It raises red flags that aren’t necessary.”

Can you keep people from having prejudices?

In an interview with The Texas Observer, Audriana Edwards, a Black Realtor in Lubbock, Texas, said, “Whenever there’s a showing, there’s a Ring camera on the front door. You know who is going to be in your house. Every day, there are many different kinds of discrimination in real estate. It could be from the camera, the letter or the person dropping off their earnest money.” 

The seller can also see the buyer at the house if the owner is there or when the contract is signed. Even knowing the buyer’s name can sometimes be enough to cause bias. The point is that you can’t get away from it.

If we ban the buyer love letter because it “could” or “might” cause discrimination, the next step would be to make sellers turn off their cameras, only show houses when the seller isn’t home so they don’t run into the buyers, and hide the buyers’ names on all documents. If you really want to avoid any chance of bias, we might as well not show any buyers any homes at all.

The truth is that you can’t avoid people being treated unfairly by living in a bubble. Discrimination is a moral flaw in people that can’t be fixed, stopped from happening or hidden from them.

Let’s think a little bit bigger. You could get in a car accident, but does that stop you from driving buyers to look at houses or from meeting your sellers at closing? Of course not. You could also fall down the stairs while carrying a laundry basket, but does that stop you from doing laundry? No. 

Almost everything in life has some risk, and as people, we are always weighing the risks against the benefits. Most things give us more benefits than risks, so we do them without giving them much thought. 

The buyer love letter is the same. As with everything in life, there is a small risk, but the benefits for your buyer far outweigh the risks. And here is the interesting thing: You have a higher risk of falling down the stairs or getting into a car accident than getting sued because of the love letter, but more on that later on.

The buyer love letter actually is in line with fair housing laws

The Fair Housing Act was passed into law in 1968, making it illegal to treat people differently to their detriment based on their race, color, religion or country of origin when it came to housing. In 1974, housing discrimination based on gender was made illegal. The Fair Housing Amendment Act added people with disabilities and their family members to the list of people who are protected by civil rights laws. Since March 2021, HUD has been enforcing the Fair Housing Act, which says that people cannot be treated differently because of their gender identity or sexual orientation.

Now, I shared this summary from their website because I wanted to bring up a simple idea that has been lost in all the fuss about the buyer love letter. The Fair Housing Act was made to protect people from losing an opportunity, not from gaining one. 

As a matter of fact, we go out of our way to create laws to combat discrimination. This is one reason why I think that, as real estate professionals, we should encourage the use of the buyer love letter. Let me explain.

The neuroscience of racism was the subject of an article in Psychology Today. The article explains how, as we go through life, we become part of a psychological phenomenon called “in-group bias.” 

The author goes on to say, 

“Our brains have changed over time so that we can deal with complicated social situations. In some situations, it might be important to be able to tell if someone is part of the same group or a different one. We are hardwired to put other people into groups based on our biases, which can change based on the social situation we are in.” 

This is where things can get tricky because sellers may hesitate when they see buyers who, according to their bias, are not like them.

In 2004, William Cunningham did a study in which he flashed African American faces on a screen in front of white participants. When the faces were shown so quickly that they could not be processed consciously, the participants’ amygdalae were more active (they showed fear, anxiety and agitation) when they saw African American faces than when they saw white faces. But when the faces were shown for longer so that the participants could actually see them, the differences disappeared.

These results suggest that there are at least two neural pathways for processing the faces of people from different ethnic groups: One instant pathway that includes our preconceived biases and a second, conscious pathway that represents a conscious regulation of feelings based on what is acceptable in society and what the person has learned in the past. 

How does the buyer’s love letter help with this? It means that sellers may have a quick opinion about the buyers, but the letter gives them the time they need to get over their biases.

Discrimination is deciding about someone based on something superficial, like the color of their skin, what they wear or what religion they follow, without seeing what they have in common. The buyer love letter humanizes the buyer by bringing to light their loves, likes and struggles to find their dream home, family and work.

In other words, it focuses on what the seller and buyer have in common: their humanity. Both the seller and buyer are people with worries, hopes, and dreams, and this letter is the link between them. So, the letter cuts through any bias a seller might have and helps them see this buyer as just another person trying to get to the next level in their life, just like them.

Some people who have heard the wrong things about the buyer love letter might say, “But Darryl, what if the seller rejects the buyer because of what’s in the letter?” 

I’ll talk more about this in a bit, but here’s a sneak peek: Unless a homeowner says, “I won’t sell my house to these people because of their race, religion, etc.,” it’s impossible to know what’s on their mind. Even though I’ve been married to the same beautiful, smart woman for a long time, I still can’t read her mind, and as much as I would love to be able to, how could I prove it even if I could?

Legal risks of the buyer love letter

When it comes to showing property, it’s much easier to prove fair housing violations. For example, two people are looking for the same type of home in the same price range and in the same area, but one buyer is shown different houses because they are from a different social class. 

That is a much easier case to prove because everything is the same (except for a person’s race, religion, etc.), and it’s just about what homes they were shown and what homes they weren’t shown. The agents of Long Island, New York, knew this all too well when many got embarrassed in the Newsday “sting” operation of 2019. 

But when it comes to negotiating offers, it’s almost impossible to say that two offers are exactly the same. This is because it’s not just the price and terms but also how qualified the buyers are to get a loan, for example. 

Look, can someone sue someone else, even if they have no proof, if they feel like they were treated unfairly? Sadly, yes. Anyone can be sued for any reason. But based on statistical averages, your chances of being sued for discrimination because of the buyer’s letter are so low that you can’t even measure them. 

You’d be more likely to get hit by lightning (1 in 15,300) or win a billion dollars in the lottery (1 chance in 302,575,350). You are much more likely to get sued if you don’t tell people about a problem with the house or if someone gets hurt during a showing.

Check out Inman’s 10 Ways Agents Get Slapped With Lawsuits for a list of other, more likely ways that agents get sued in our industry.

But what if the buyer love letter leads to a lawsuit or even a complaint about discrimination? The average of everything is zero. Why? Because there have been no lawsuits, complaints to the NAR, or complaints to HUD about the buyer love letter since the Fair Housing Act of 1968.

Bryan Greene, vice president of policy advocacy for the National Association of Realtors, used to be in charge of fair housing enforcement at the U.S. Department of Housing and Urban Development (HUD) before he started working for NAR. In an interview with CNN, he said that he had never heard of a complaint to HUD that was about buyer letters. 

“No one at HUD or in the civil rights division of the U.S. Department of Justice has ever talked about this problem. So, there has been a real debate about it among people who work in real estate.” 

He says that the liability is mostly a guess. He continues, “It would be hard to file a fair housing complaint unless you knew for sure that a seller made a choice based on something in one of these letters that was about a protected class.”

He warns potential buyers who lose a bidding war that they might wonder why the seller chose the buyer love letter buyer over other bids. Then “you’d have to prove that the seller relied on a specific discriminatory part of the letter” to not choose their offer, he said. 

According to “You Love the Home, but Should You Write a Love Letter?” in The New York Times, the answer to the question of whether or not buyer love letters lead to discrimination is, “There has never been a lawsuit against a seller or a real estate agent for discrimination based on a love letter.” Lawyers who work with real estate say it would be very hard to prove or prosecute in court.

It is not against fair housing to choose a buyer based on something they wrote in a letter

In the article “How to Handle Buyer Love Letters” in the NAR Magazine, the authors give some advice that I find worrying.

Alexia Smokler, a senior policy specialist for fair housing at NAR, said,

“The buyer is writing the letter in the hopes that the seller will choose their offer. But the seller could be in violation of fair housing laws if the letter says the buyer’s race, religion, national origin, or another protected category, and the seller chooses the offer based on that information.”

I’m sorry, but that’s not right. As Charlie Lee, NAR’s senior counsel, says in his video Window to the Law, 

“The Fair Housing Act makes discrimination illegal in the sale or rental of housing and prohibits making housing otherwise unavailable because of race, color, national origin, religion, sex, disability or familial status.  The word ‘prohibit’ is key here. The Fair Housing Act prohibits making housing otherwise unavailable because of race, color, etc.”

So if a seller decides to choose someone because of a letter, there is no chance of legal trouble. Choosing someone because of the letter is the opposite of prohibiting. And even if someone from a minority wrote the letter and put their race and religion in it, would they sue for discrimination if they won the house? Of course not. 

Now, if they didn’t get the house, the buyer would have to show that the seller’s decision was based on something written in the letter and how they felt about it.

No one can read minds, so unless the seller says very clearly, “I’m not selling to this person because they have that skin color” or “I’m not selling because they belong to that religion,” no one can prove that it was a case of discrimination. Let’s return to what I said before: Since 1968, not one single complaint has ever been made to the government.

According to fair housing principles, it is not unfair to make a decision that is in someone’s favor. On the fair housing website, there is not a single case of a member of a protected class getting a housing benefit. As a matter of fact, there are laws designed to help minority people benefit because of their minority status. That is why we believe the love letter is actually in line with the fair housing law.

There is more legal exposure to prevent someone from writing or reading a buyer love letter

In the same New York Times article, a buyer who wanted to write a personal letter to the seller ended up in a bidding war because the seller refused to look at any “love letters.” So, to get the house, the buyer had to pay $500,000 more than the asking price. 

The New York Times goes on to say that this could be seen as a clear violation of a buyer’s First Amendment rights. The buyer has more of a case to sue for not letting her write the letter or preventing it from being read, because she had to pay extra money in order to win the house.

Another case to make this point: At the beginning of 2021, Oregon passed a law that stated listing agents had to turn down buyer love letters. In response to Oregon’s decision to ban the letters outright, NAR put out a statement that said, in part, “We do not know of any cases in which these letters have led to lawsuits or other legal action elsewhere in the country.” 

The law, which was passed by the Oregon legislature in 2021, said that real estate agents could only accept “customary documents” from potential buyers. Oregon was the only state to have this law, which was meant to stop sellers from being unfair when choosing who would buy their home.

When they made this law, they didn’t realize that they were taking away our first and most important human right, which is the right to speak our minds. The real estate company Total Real Estate Group sued Oregon’s Attorney General Ellen Rosenblum and Real Estate Commissioner Steve Strode, saying that the law broke the First Amendment. Attorney Daniel Ortner, who worked for the company, said that these letters can help buyers who don’t have much money.

“Buyers might not be able to compete on things like how much cash they can put down,” Ortner said. “[The love letter] gives them a chance to compete because they can say why they love the house.” 

With a preliminary injunction, District Judge Marco A. Hernández stopped the law from being enforced because he thought it was “likely” against the Constitution. Then, Hernández came to a final decision with a consent decree that said the law broke the First Amendment.

Mr. Ortner said, “Housing discrimination is a real problem, but these letters tell the seller accurate, honest information that will help them. The idea that they lead to discrimination is just speculation on speculation.”

If you look at any of the many articles out there that warn about possible lawsuits, you’ll notice that they all have one important thing in common. None of the articles say that an agent will be sued or that they have been sued. Why? Since 1968, there have been zero lawsuits filed based on the buyer love letter. 

I encourage you to read the articles and do the research for yourself, and you’ll see that there’s a very small chance you’ll get in trouble with the law if you tell your buyers to write love letters or if you let them be read by a listing agent.

Someone, somewhere, made a big deal out of buyer love letters and turned them into a debate about possible discrimination that was full of rumors and controversy. Using the fear of legal trouble without a single legal statute, case law or action to back up that claim is just plain wrong, and I hope that this article will help clear up the misinformation in our industry.

 It’s a shame that time, money and effort have been spent on something that only helps buyers when there are so many other things that can be brought up to protect brokers. We shouldn’t take away a buyer’s rights under the First Amendment. 

Legally speaking, there is a greater risk of legal bias from buyers who think they overpaid for a home or that you didn’t tell them about structural flaws on a property than there ever has been or ever will be for a suit based on protected status bias.

Before we act out of fear, let’s think — and think clearly. Let’s question warnings that aren’t true or don’t make much sense, especially ones that will keep our clients from buying the homes of their dreams and cost them a lot of money in bidding wars.