“Dear Seller” Letters
Competitive edge or fair housing violation?
In a competitive market, a buyer may be looking for any advantage over other buyers to induce the seller to select that buyer’s offer from a pool of interested and eager buyers. One strategy buyers are using to try to gain an edge is personalizing the
buyer’s offer by including a “Dear Seller” letter with the offer. The “Dear Seller” letter may include personal messages from the buyer and videos or photos of the buyer or buyer’s family.
A letter admiring a home’s historical significance or discussing the landscaping may be perfectly fine and would not pose any fair housing violation risk. But when a letter includes information about the buyer’s marital status, race, religion or other information that allow the seller to determine or assume
characteristics about the buyer and the buyer’s membership in a protected class and choose among a group of offers based on that assumption or information, these letters become sources of potential fair housing violations.
What do buyers need to know?
- Some sellers may refuse to review any “Dear Seller” letter or refuse to review offers that incorporate “Dear Seller” letters thereby eliminating that buyer as a contender for that property.
- It is the buyer’s decision if they want to write a “Dear Seller” letter to be presented to the seller.
- Agents can discuss other ways with buyers to draft a competitive offer such as including earnest money, proof of funds and other contract provisions that can make a buyer’s offer stand out in a crowd.
What do sellers need to know?
- A seemingly innocent letter referencing a buyer’s future joy at seeing the buyer’s children run down the stairs on Christmas morning conveys the buyer’s family status and religion to a seller, both of which are protected classes under the Fair Housing
Act.
- Using protected characteristics as a basis to accept or reject an offer, as opposed to price and terms, would violate the Fair Housing Act.
- Sellers can prohibit an agent from presenting “Dear Seller” letters by including instructions in the listing contract such “agent shall not present any offer accompanied by or incorporating a letter from a buyer.”
What is the role of a Wisconsin real estate agent?
- Agents can point out the problems that can occur when the letters include misrepresentations, inaccuracy, misleading statements, contractual obligations, and unrealistic promises and conditions.
- An agent may educate buyers about fair housing law and the pitfalls of “Dear Seller” letters and point out the non-discrimination provision in the buyer agency agreement if the buyer is a client.
- If the buyer decides to write a “Dear Seller” letter, agents are obligated to draft as instructed by the party they are working with or representing.
- An agent should not advise buyers on what should be in a “Dear Seller” letter and should not offer guidance as to what information would be considered “safe” and not a fair housing violation.
Where can people find more information?
"Dear Seller" handout
This "Dear Seller" information is also available as a downloadable PDF handout.
Download PDF