What is a real estate love letter and is it a bad idea?
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Shopping for a home can be a difficult and stressful time. You dedicate days to touring houses and waiting to find one that you can make into a home. Once you find the one, you make an offer and hope that you win the bid.
In competitive markets, you can lose bid after bid, and it can get demoralizing. You then might start looking for other ways to make your offer stand out.
One thing some prospective buyers do is write what’s known in the trade as a love letter to the seller. However, this might not be the best idea for a few different reasons, which we will explore.
What is a love letter in real estate?
In real estate, a love letter is a note that you write to the seller of a home and submit alongside your purchase offer. Typically, love letters note a few things that you like about the home, why you’re excited to buy it, and how you’re looking forward to building a life with your family there.
In the past, love letters were a common practice and often helped offers stand out. Many people felt good about selling their home to someone who cared enough to write them a letter.
But in recent years, love letters have become less popular and are even discouraged.
Should you write a love letter to a home seller?
In general, writing a love letter to the seller of a home isn’t a good idea. Even if you’re in a hot market and feel tempted to do anything you can to make your offer stand out, you should resist the temptation. They’ve grown less popular over time for a few reasons.
First is that love letters can potentially be viewed as a violation of national fair housing laws. The Fair Housing Act, passed in 1968, forbids home sellers from discriminating against buyers based on things like race and sex. Sellers who read love letters to choose a buyer may be viewed as violating this act because they’re looking to make sure they sell to the “right” people.
This is one of the reasons that the National Association of Realtors (NAR) officially discourages love letters in real estate transactions. In fact, the group recommends that Realtors not read or deliver love letters to sellers.
There are ongoing legal proceedings around the practice. Oregon banned real estate love letters starting in 2022. Though a judge blocked the ban from going into effect, the case is still working its way through the court system.
Even ignoring the legal concerns, a love letter can backfire. Danetha Doe, economist at Clever Real Estate, notes, “writing a love letter could be a bad idea if you include any personal information that may not align with the values of the seller. For example, information about your faith or family life may be off-putting.”
All in all, writing a love letter is a bad idea. However, if you feel like you must send one to the seller, Ryan Fitzgerald, a real estate agent and owner of Charlotte, NC-based UpHomes, advises, “If you’re still set on writing a letter, leave out personal details about yourself that could trigger a violation of the Fair Housing Act. Instead, focus on what drew you to the property and why you’re so interested in the home.”
How else can I make my offer stand out?
While love letters aren’t the best way to make an offer stand out, there are some other things you can do.
Making sure you’re pre-approved for a loan is one important thing you can do to give your offer a bit more appeal. It shows the seller you’re serious about buying a home and that you have the finances to afford it.
Limiting the number of contingencies in your offer can also help because it reduces the chances that the sale will fall through after the seller accepts.
Consider increasing your down payment. A larger down payment shows that you can afford to buy the home and reduces the odds of appraisal issues.
An escalation clause can also help in especially competitive markets. This clause states that you’ll beat the highest offer by a certain amount (up to a point). You might spend more than you expected for the home, but it gives you a better chance of winning with your bid.
The real estate market can be tough for buyers, and it’s easy to reach the point where you’ll do anything to buy a good home. While writing a love letter used to be common advice, it isn’t a good idea. You’ll want to use some other strategies to help your offer stand out.