Monday, February 22, 2021 - by Robert Backer, president, Greater Chattanooga Realtors
Recently for Valentine’s Day, you may have received a sweet note from a loved one. That’s all fine and good for showing affection, but in real estate, “love letters” can take on a different meaning. In some cases, such letters can jeopardize a home sale and even run afoul of the Fair Housing Act.
Especially in a low inventory market and multiple offer situations, these letters are more common. The intent is to entice a seller to choose their offer and describe the many reasons why the seller should “pick them.”
So you might be thinking, “So? What’s the big deal?” While it might seem like a creative way to get noticed by the seller, believe it or not, this practice can pose fair housing risks. These letters often contain personal information and reveal characteristics of the buyer. Based on the letter’s contents, there could be references to the buyer’s race, religion, or familial status, all of which could then be used, knowingly or through unconscious bias, by the seller as an unlawful basis for accepting or rejecting an offer.
Consider a buyer painting a verbal picture of their children running down the stairs on Christmas morning for years to come in the house. Not only does this statement reveal the potential buyer’s familial status, but also their religion, both of which are protected classes under fair housing laws. Using protected classes as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act.
Further, the Code of Ethics requires that “Realtors shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status,
national origin, sexual orientation, or gender identity. Realtors shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.”
Since it is so hard to write a note and avoid such personal details, it’s best not to write a “love letter” at all. I urge my fellow Realtors to inform their clients of the potential pitfalls of such letters. Not only should we discourage this practice, Realtors should not deliver these letters, definitely not help draft or edit them.
In serving our clients, realtors help them learn what’s involved in the homebuying and selling process. And it’s also important to protect our clients, and ourselves, from the potential liability related to these notes. Realtors are charged to protect and promote the interest of their clients. That’s Who We R.