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  • Real Estate Love Letters... (you may be breaking up)

    Monday, February 19, 2024   /   by Amy Brown

    Real Estate Love Letters... (you may be breaking up)

    In a hot market, buyers will try any strategy to get a leg up on the competition, including writing a "love letter" to the seller. But is this really a good idea? What you may not realize is that a buyer love letter could get a seller into some very hot water. And...it may not be the best strategy on the buyer's side either. Here's why.

    Legal Implications

    Buyers tend to disclose personal details about themselves in love letters in order to appeal to the emotions of the seller. It is a psychological fact that humans tend to like other humans that are most like themselves. But stories that may seem harmless could actually be considered discriminatory under the Fair Housing Act. For example, the buyer describes his family sitting around the Christmas tree, opening gifts, and enjoying hot chocolate while they watch the snow softly falling...picturesque, harmless story? No! Actually you have just disclosed familial status and religion. If a seller were to base their decision upon those factors instead of merely the facts of the offer alone (offer price, deposits, and dates), it goes against the Fair Housing Act and could have legal repercussions. 

    Videos and personal photos are also a no-no. It indicates who will be living in the home and could be argued as a decision making factor and thus discriminatory.

    But let's put the shoe on the other foot...

    Sets a negative tone for the transaction

    You are selling your home that you have lived in for 10 years. It sits atop a knoll with stunning long range mountain sunset views. The home is in excellent condition as you have been diligently maintaining it, however, now you have a loved one in another state that needs care assistance so you will be moving closer to them to help. You put your home on the market and you have an offer...but...the offer is $35,000 under your asking price. The buyer's agent gives you their love letter. As a seller, how does that make you feel?

    Before Mark and I were married, he had this exact thing happen to him. He owned a log cabin on the top of Bearwallow Mountain with a stunning view of the valley and city off in the distance. He had a couple offer significantly less than what he had it listed for and write him a letter stating that they had been "searching for this view their whole lives". His response; "I wish you the best of luck". 

    From a seller's perspective, it can feel like you are being manipulated to have someone attempt to persuade you to sell your home to them without compensation for the value. While that may not be the buyer's intention (from their perspective it may feel like a compliment), to the seller it is an emotional appeal in exchange for value and can feel very offensive. What then occurs is that the seller will generally not return with a counteroffer; they will simply walk away.

    Better ways to make a strong offer from a position of value

    Regardless of whether a letter is delivered with the best of intentions, the National Association of Realtors advises, just don't do it. And if you are a listing agent, do not accept love letters. It opens up too many doors to legal violations. Also, there are numerous other ways to express your desire that appeals to a seller from a position of value. 

    Instead of a letter, do this:

    1. Share your credit score - this shows that you are very strong candidate to have your loan close and close on time.

    2. Make an additional deposit - an additional deposit can go a long way to prove good faith and intention

    3. Be flexible on your due diligence and closing dates to accommodate the seller's needs.

    All of these additional negotiation points show that you value the home and the seller's time and consideration. They also show intent and a willingness to follow through with the transaction. For a seller, it is not always the price that closes the deal. If they need extra time to close on their next home or some extra cash in their pocket before closing day, that can go a long way to choosing your offer over someone who simply has a higher offer price. In a highly competitive real estate market, being flexible, fair, and considerate can go much further than you think.