A personal offer letter is a piece of writing from home buyers to sellers as a way of introducing themselves when putting in an offer on a home. These letters generally contain a short bio of the buyers, why they love the home, and why their offer should be chosen. Some buyers also choose to attach a photo of themselves. Buyers believe their offer will have a better chance of being accepted if they can add personality or a story to the number they submit. Letters to sellers have been up for debate because of the role they play in Fair Housing Laws.
The goal of these letters is to be able to submit stories and photos along with offers as a way to personify the transaction and hopefully appeal to the seller on a personal level. Hopefully, the seller would read your story, fall in love with it, relate to you, and choose your offer, however, we can’t guarantee that this will be the scenario that takes place. The real estate transaction is usually an emotional one, especially when we’re working with residential purchases. Sellers are leaving a home they have memories attached to and buyers are usually making the biggest investment of their lives. This emotion can be taxing enough on both parties without the addition of the vulnerability that accompanies personal offer letters. When you put your personal information up for debate, you are taking another risk.
Fair Housing Laws
A personal letter could disqualify you for reasons that are uncomfortable to consider. If you give information about your family, life goals, occupation, what you look like, etc. you may be giving away other details such as your familial status, sex, race, sexual orientation, religion, ethnicity, marital status, and more. Unfortunately, this information can lead to your offer not being chosen due to the personal biases of the seller.
It is against Fair Housing Laws to pick or reject a buyer based on their race, color, creed, religion, national origin, sex, marital status, disability, public assistance, sexual orientation, or familial status. By writing a letter that gives away these details, a seller may use them to make their decision. Ideally, a seller will review offers and choose the best one without considering the personal identifying factors of the buyer, such as those above.
A buyer wouldn’t have to worry about violating Fair Housing Laws by submitting a letter because they are the ones choosing to buy, but these “love letters” can put sellers in an uncomfortable position because they can be in violation of Fair Housing Laws when using personal information to decide on which offer to choose. Even though they may want to choose an offer regardless of the information enclosed in a letter, they may feel uncomfortable choosing that offer given the risk involved when details about that buyer’s membership or non-membership to a protected class have become available. For example, Sam and Sarah put in an offer with a letter to Jim, who is selling the property. Jim reads the letter and finds out Sam and Sarah are members or non-members of a protected class. Jim receives a similar offer without a letter from Mark and Mary. Since Mark and Mary’s offer has come without a letter, Jim knows nothing of their status in relation to protected classes and feels more comfortable moving forward with their offer, as his agent has educated him on Fair Housing Laws and he is afraid of being sued for choosing Sam and Sarah given their membership to a protected class or lack thereof.
Protect Your Best Interest
Some sellers see a personal letter as a “show of hand”. Telling your story might lead to a seller believing you have less power should your transaction move into negotiations. There is a belief that even if a letter gets you accepted, it can weaken your position to negotiate when it comes to price and inspection. What you share in your letter may be intended to win the heart of the seller and appeal to their sympathetic side, but could end up giving you the short end of the stick come negotiations. A letter can reveal information about your occupation, familial status, marital status, and other factors that may inform the seller of your financial situation. Make sure you are considering how the information you share could be used against you down the road.
There is a safety risk in sharing too much information with a seller. Just like how we practice safety online, we must be mindful of the details we give and the risks involved with making you/your family identifiable. We don’t know the seller personally and while we want to see them as good people who will protect our information, that is not a guarantee. Make sure you are considering your best interest if you are writing a letter. Can the information you’re providing be used against you?
Sometimes writing a personal offer letter can be a good way to add personality to an offer and be appealing to sellers, however, there are risks involved that should be considered before submission. Make sure you understand all of the above information and talk with your Realtor if you have any questions.