January 22nd, 2019 4:30 PM by Taydus Taydus
If you have purchased a home, or submitted an offer in our competitive Boulder or Broomfield County market, and have found yourself competing with other offers for the same property, chances are your Realtor® has suggested that you write a letter to the home seller to help personalize your offer and evoke an emotional response. These letters are affectionately known in the business as “love letters”.
In the world of real estate there are classes that are protected from discrimination (as it should be). This rule is in place to protect the public and level the playing field. The protected classes in the state of Colorado are:
As you can see, this is a good thing, as it protects potential home buyers from being discriminated against based on the above listed protective classes.
So what happens when a potential buyer submits a “Love Letter” to a seller along with their offer to purchase their home? Maybe, for example, the letter says something like this:
“The moment I stepped into your beautiful home, I just knew it was the place for me, and my three beautiful children! As a single mom that is new to the area, I instantly felt safe as I drove through the neighborhood and noticed the playground and other young families. I noticed the Catholic Church on the corner and thought just how wonderful would be to be able to walk to church every week. I hope that you will give my offer serious consideration, as I just know that it is the right home for me and my family, and I promise to love it and take excellent care of it, as it is so apparent that you have.
Thank you for your consideration.
Let’s say that the home seller receives two to three of these love letters along with offers to purchase their home. Maybe the author of the letter above did not submit the highest offer, but something about that letter warms the seller’s heart; maybe the seller is deeply involved in the church on the corner and likes that this buyer will also be involved with the church. Maybe the seller is good friends with some of the neighborhood families and is conscientious that his/her neighbors would like to see more children move into the neighborhood.
Based on her feelings about the author of the letter, and what she wrote, let’s say the seller chooses her offer above the others.
Can you see how this “Love Letter” could unintentionally influence a seller to make a decision in violation of the protected classes?
If you are a home buyer:
Your Realtor® should not be encouraging you to write love letters (I am guilty of this myself, but will no longer continue to encourage this practice).
If you are a home seller:
You are at risk if you are accepting offers along with love letters from potential buyers. Make sure you have a conversation with your listing agent about the pitfalls and potential legal consequences of accepting love letters.
There should be clear written communication between you and your listing agent about your wishes regarding love letters.
If you elect to accept love letters, then your listing agent should have it documented that love letters will be accepted from potential buyers, that your Realtor® advised you otherwise, and that you should seek legal counsel to have your liability explained to you by an attorney.
If you elect not to assume the potential liability and not accept love letters, this too should be in writing between you and your listing agent, and it should also be clearly stated in the MLS.
Please CLICK HERE to watch a video from DORA (the Department of Regulatory Agencies) surrounding the subject of love letters. The video is intended for Realtors® however there is value for home buyers and sellers as well.