A well-written real estate love letter can reduce a buyer’s purchase price by 1% – 10%. If we’re talking about a $1 million property, that’s $10,000 – $100,000 in savings. Therefore, learning how to write a real estate love letter is essential if you want to save on your next property purchase.
At the very least, a real estate love letter can help you get a counteroffer when a seller receives multiple offers. Staying in the race is vital if you really want the property.
Yet most people, out of ignorance or laziness, don’t bother writing a real estate love letter when making an offer. Be different from most buyers and write one!
Care Enough To Put In The Time
After every job interview, writing a hand-written note can make the difference between landing the job or not. Yet, few people bother to write a hand-written thank you letter either.
I firmly believe one of the reasons why it’s so easy to get ahead is because most people don’t care enough to try. Folks are kinda clueless when it comes to building rapport with others. Instead of first trying to give, it’s all about taking, taking, and taking some more.
There is no downside, only upside, to writing a real estate love letter to try and make a connection with the seller. The listing agent has a fiduciary duty to present all offers as is. Thus, the greater the connection you can make, the greater your chance of getting the best deal possible for a property you want.
Another person’s lack of emotional intelligence is your pot of gold! As someone who loves real estate and writing, let me share with you how to write the ultimate real estate love letter.
For background, I have written over 2,500 articles on Financial Samurai since I started the site in 2009. I am a Wall Street Journal bestselling author of Buy This, Not That: How to Spend Your Way To Wealth And Freedom. With about $140,000 of my passive income coming from my various real estate investments, I am an expert at writing real estate love letters.
How To Write A Real Estate Love Letter
The keys to a good real estate love letter are:
- Finding a common connection with the seller
- Increasing the perception that you are a dependable buyer who won’t flake during escrow
- Reducing or eliminating the perception that you are a profiteer/flipper
- Pointing out specific things you love about the property and how incredible the home is
- Describing why you would be the perfect owner of the property
- Sharing information you feel that will make the seller like you
- Keeping the letter to 600 words or less (two pages), but preferably one page
- Be genuine in your real estate love letter
- Introduce yourself and your family members
- Talk about the future of your family
- Mention what you appreciate most about the home
- Make sure the real estate love letter is edited without grammatical mistakes
Below is an example of our initial real estate love letter we sent to the seller with a written offer of $1.55 million. The asking price was $1.95 million with the hope that it sells for closer to $2.1 million.
At the time, we did not know the names of the sellers, only the listing agent’s name.
Example Of A Real Estate Love Letter
My wife and I are interested in purchasing your lovely home. We live just a block away on the same side of the street next to Julia’s house (a neighbor they knew) at (our address). We first purchased and remodeled (name of our house’s original owner) home back in 2014.
The remodel was a labor of love for 1.5 years, but it gave us the experience and confidence to update and remodel an older house again. Not only did we remodel all bathrooms and kitchen, we also painstakingly landscaped the entire grounds.
We love living in Golden Gate Heights and know the neighbors and the neighborhood quite well. Because we work from home, there’s no need for us to commute downtown either.
In 2017, we were blessed with a baby boy and we are hoping to have another child sometime soon. Your family’s house seems like the perfect fit for us and our expanding family.
Further, the house is large enough to have one set of parents move in with us if need be. Our parents are in their 70s, and we would like to make preparations to take care of them when it’s time for them to need assistance.
If we are fortunate enough to buy your house, we would spend several hundred thousand dollars over the course of two years to update the house. We’d paint the exterior, get a new roof, replace the water heater and furnace, update the electrical, change the windows, update the plumbing, remodel the bathrooms and kitchen, and maybe even create a deck to enjoy the western sun.
It will be an extensive and arduous endeavor, but we plan to own the home for decades and take great care of it. Maybe in 20-30 years, when our boy graduates from college, he might be able to move in and start his own life there as well one day.
After working hard and saving diligently for the past five years, we are in a position to pay $1.55 million in cash for your home. We would then set aside $300K over the next two years to pay for the remodeling. There are always unexpected surprises that come up during rehabilitation.
As we have experience selling and purchasing several homes before, we are comfortable with a quick three-week close without any financing contingencies. We understand the uncertainty when it comes to selling a home, as we sold a property we owned for 12 years in 2017 to simplify our lives. As a result, we promise to make the closing process as quick and painless as possible.
The three weeks will give us time to have one of my contractor friends come by to inspect the house and move our funds from our investment accounts to our bank.
Thank you for your time and consideration. We look forward to hearing from you.
Sam and family
Review Of The Real Estate Love Letter
From the letter, you will notice that we made the following points:
- Made sure they knew we were neighbors.
- Made it clear we were long-term owners who planned to raise a family in the house.
- Highlighted their neighbor, whom we also know.
- Made it known we plan to rehab the house and take great care of it.
- By highlighting we plan to put in $300,000 to remodel the house, it makes them realize that we aren’t just spending the initial offer price. We also remind them how much time and work it takes to rehab the property if they do not sell.
- Empathized about the stress of selling a property and reassuring them we’d be a trouble-free, 21-day, quick close with all cash.
- Emphasized our desire to grow our family, since they were a large family with five siblings.
- Included our family holiday picture with our son who is as cute as a button.
After two days, the agent got back to me and said they were “very pleased” with our offer! Remember, the agent initially wanted to list the property for $1.99 million. Our real estate lover letter effectively negated any offense a seller may have taken by our low-ball offer.
Thanks to the real estate love letter, we were able to start our negotiation with a low anchor price. From there, we would hopefully agree to a price somewhere in the middle.
Spend Time Writing A Real Estate Love Letter
The goal of your low-ball offer is to anchor low and negotiate your way to a higher price that is still below estimated market value.
The main goal of your real estate love letter is to lessen the unhappiness your low-ball offer may cause. Your letter should humanize your offer and make it clear that you are a serious buyer who is willing to negotiate.
Unfortunately, our low-ball offer was not accepted because they were waiting for an official appraisal. But this was to be expected. Only after they get the appraisal will they respond to our offer.
An appraiser is an independent operator who objectively comes up with a value for a property. The value is based on rebuilding costs and recently sold comps. The appraiser’s estimate is just one person’s opinion, albeit a person who appraises properties for a living.
I knew with 99% certainty the appraisal report will come back higher than our $1.55 million offer. I also felt with 70% certainty the appraisal report will have a $2 million value or higher.
The Final Price Agreement
We patiently waited for the appraisal to come back instead of trying to make a higher offer too soon. After all, I, too, was curious to hear what the appraiser comes back with.
Even if he came back with a higher number, I was confident that the allure of an all cash offer, a quick close, and a friendly buyer from the neighborhood will be good enough variables to get us a deal.
Besides, if needed, I still have one last strategy up my sleeve: The Real Estate Breakup Letter and a price concession letter! You’ll need to learn how to write both types of letters in particularly sticky situations.
10 days later, the appraiser came back with a property valuation of $2 million. The seller countered with $2 million and I countered back with $1.7 million. The seller still wouldn’t budge and decided to list the home on the market for five days.
Raised My Counteroffer Price
I decided to increase my offer price by $40,000 to $1.74 million with a new real estate love letter. In the end, they accepted.
Thanks to writing two real estate love letters and one real estate breakup letter, I was able to save between $100,000 – $250,000 off market value at the time.
Below is a Redfin estimate showing how a real estate love letter enabled me to buy about 10% below the fair market value at the time. The $ sign signifies where I purchased the property versus the estimated market value.
Below is another Redfin estimate as of July 2022, which shows an even bigger discount to fair market value. Redfin constantly revises its algorithm. But the truth is, a real estate love letter was instrumental in me getting a better deal. Use my FS20 Property Indicator as one way to buy with confidence.
The Redfin and Zillow estimates are often wrong at the time of transaction. Hence, you must try and forecast where the valuations will go in the future. Always practice predicting the future to hone you real estate investing abilities.
A Real Estate Love Later Saved Me Six Figures Off The Purchase Price
If you don’t want to put in the effort to write a real estate love letter to potentially save 1% – 10% off the purchase price, then stick to investing in REITs and real estate crowdfunding.
There’s definitely a beauty to keeping things simple and being all numbers. Personally, I’m happy to do both. As a father to two young children, I love earning income 100% passively through real estate crowdfunding. At the same time, I love building a rental property portfolio to see, touch and manage.
Given interest rates have gone way done, the value of rental income cash flow has gone way up. It now takes a lot more capital to produce the same amount of risk-adjusted income. Therefore, I’m an aggressive buyer of real estate today.
And of course, when you put in that offer, don’t forget to write that amazing real estate love letter!
Alternative Real Estate Investing Options
Owning physical real estate as an investment can be cumbersome. It’s one of the reasons why I sold a rental property back in 2017 when my so was born. Dealing with tenants and maintenance issues can be a real pain.
I reinvested $550,000 of my rental property sale proceeds in real estate crowdfunding to earn income 100% passively. No real estate love letters are necessary when investing in private real estate deals.
Best Private Real Estate Platforms
Fundrise is my favorite real estate crowdfunding platform for all investors. They were founded in 2012 and now have over 400,000 investors and $3.5 billion under management.
Fundrise has consistently been one of the most innovative companies I’ve come across. Investing in a Fundrise fund is simpler and provides diversified exposure to single-family and multi-family rentals in the Sunbelt. It’s free to sign up and explore.
If you are an accredited investor, take a look at CrowdStreet a real estate marketplace. It primarily focuses on secondary metro markets that are lower cost with higher cap rates. These cities include Denver, Austin, Memphis, and Charleston.
Due to technology and the rise of the freelance economy, investing in lower-cost growth cities will be a multi-decade trend. The global pandemic has really encouraged millions more people to work from home and geoarbitrage to save money.
The housing market is very strong and will likely stay strong for years to come. Therefore, learn how to write a great real estate love letter and save.
The downside is that these “love letters”, which can be common, open the seller or even renter to discrimination lawsuits from the other buyers. You can’t and shouldn’t rent or sell based on these factors (I.e. I wanted to rent to a single mom or I don’t want kids in my house). It is illegal! The sellers shouldn’t really know anything about the buyers other than the financial offer.
If you’re an agent, write a good offer and don’t waste your time on a letter that basically says “ I can’t afford this house! Sell it to me anyway?”
Financial Samurai says
How old are the buyers or renters who lost ever know what were in the contents of the letter? Further, how can a buyer or seller who lost prove the seller sold because of the letter and not because of a solid financial offer?
I’d love for you to show me a case where a seller got sued because of a real estate love letter and lost.
The freedom of speech is a powerful freedom in America.
My wife and I wrote a real estate love letter for a unit in a high rise condo in Kakaako that was built in 2016, but it had several serious construction defects (one of them is the infamous PEX plumbing connectors defects). Our realtor informed us he could submit the letter with the reasoning for our offer but any information about us would have to be removed. Ultimately, we decided not to place an offer, but is this something new or specific to Hawaii?
Sam, just want to let you know this post is tremendously helpful. I was not aware it’s a trend to write a letter to the seller until you wrote about it last year. Largely forgot about it all in the last 12 months until my realtor had asked me to write a letter to accompany our offer for a house. Should the sellers decide to counter our offer – I will reference your real estate break up letter as well.
The practical advice over the years (such as refinancing, considering life insurance among other things) is what brought me back to your site on a daily basis – in hope of catching the latest post you have written.
In a world full of people posting negative comments, I just want you to know there are also plenty of us who are truly appreciative as well. As an Asian American myself – I also echo many of the sentiments you had shared, both the privileges you had identified for Asians in America, and also the disfranchisement we face at times.
Hopefully this comment finds you well, keep up the good work.
Financial Samurai says
Thanks Charleston. Best of luck with your offer. I truly believe a real estate love letter makes a difference, especially as the demand for real estate has gone way up with all of us spending more time at home.
I’m bullish about real estate in the future. There is so much pent up demand and cash waiting to buy real estate once we get her immunity.
Thank you. Offer accepted so now we move on to the inspection, P&S, finalize financing etc.
In my case I was able to save $3000 because our accepted offer was actually the second highest offer. I’d like to think the letter played a part to at least establish my family as a serious buyer who they would feel comfortable passing the torch to.
My ratio came out to be monthly payment at 8% gross income, 27% saved on home value, value of home is 2.25x gross income. Hopefully our reserve borrowing power would allow us to add to the few condos we already own. Need every passive dollar we can generate to survive in the coastal city.
First time commenter. I have been following your blog for over 5 years now and really appreciate all that you do. So i also followed your guidelines and wrote a real estate love letter, complete with a picture of my family. I was fortunate that it was a FSBO, so i was able to make a connection and use that to my advantage in the letter. So, we sent the letter with a low ball offer knowing that they wont accept, but using that to start the negotiation process, they responded with a $50K reduction in their asking price. At this point, their property was on the market for 3 weeks. They indicated that they loved our letter and picture of my family, etc and would like to sell to our family, however they can only go as low as $50k given what they feel their property is worth. We countered and said, its unfortunate but we cannot budge as we gave them our final offer. So we really loved the property and its a sellers market, so was worried that it would disappear. So we gave it another 2 weeks and then offered $20K more, which would have put them at $75K below their ask. We also got our realtor to go down to 1.5% from the 2% they demanded. At the end of the day, they accepted our offer and now we are in contract.
Next steps now is deciding between a 10/1 arm and a 30yr fixed. I have diligently read your blog and know you are in favor of the arm. This is not our forever home, however I dont know if we will be here past 10 years, i hope we move, but even if we do, it will likely be in year 8 or so. Rates for 10/1 being offered are 2.5% and 3% for the 30yr fixed based on a 500K tier for relationship pricing. We get 0.025% reduction for the relationship pricing. Ill love to get your thoughts on whether it is worth it to do the 10/1 or if to stick to the 3% given thats a low rate and the difference is just 0.5%. The amount financed is $1.4M.
Thanks so much and look forward to your response and those of other readers.
Financial Samurai says
Congrats! I think 10/1 ARM at 2.5% is a fantastic rate and I would go with that.
A month or so ago you wrote about attaching a “love letter” with a house offer. I had never heard about doing that and I thought it was great! My parents were actually putting in a offer the following day and I had to share your thoughts. There were offering 10% less than the listing price which they felt was going to get rejected. I helped draft the letter to give further explanation of the offer price and they submitted the offer. Their realtor shrugged it off, and then was completely shocked when their offer was quickly accepted!!! I definitely felt like the letter made all the difference.
Personally, i dont think this type of letter would be enough to make me choose a lower offer (all else being equal). But I suppose in cases where you’re submitting a lowball offer (but might be the only offer that’s being submitted), it could help prevent the seller from feeling insulted and rejecting it out of hand. My wife and I recently bought a place, and there were multiple offers. Our broker wrote a “love letter”, and though we weren’t the highest bidder (we were under by about 10k), the sellers went with us. I later learned that the real reason they went with us was because “we seemed nice” and they thought it would be a “fast sale” (which it was, but they got annoyed with us adding in some things we wanted fixed). So…I guess the love letter kinda worked but only cause it made us seem like pushovers….lol
Financial Samurai says
Did you just make a circular argument? Congrats on your new home. Remember, not all real estate love letters are written equally.
And if you notice, most men are not swayed by these letters, or so they think. Buyers need to know their sellers.
We sold our house back in 2015 and received a letter with the offer and I thought the letter was an odd touch in general. We were making a business transaction, it was all about the price and terms for me. I couldn’t care less if the buyers wanted to move in and knock the place down or gut the entire place.
The only information that mattered to me came via text from my agent prior to the letter: the price they were offering, the down payment they were making and the length of escrow they were seeking.
All the BS in the letter was just that–BS. Where they came from, how old their kids were, where they went to school, it was filled with all kinds of junk, a page-long.
Honestly, I remember nothing about the letter, all I remember is the offered full price, $400k down and wanted a 30-day escrow.
Letters are lame in my opinion.
Financial Samurai says
Perhaps the letter writer didn’t write a good letter?
Do you regret selling in 2015? What did you do with the proceeds?
I guess my point was that there is no “good” or “bad” letter. The letter is just a letter–terms are everything. A good letter with a crappy deal is still a crappy deal (not implying your offer is in anyway crappy, just speaking in general terms)
I can see emotions flaring up on the buying side as the house “you always wanted” becomes available, but for selling, check the emotions at the door–its all about business. The financial terms are everything, good and bad letters are going in the same place–the trash.
I don’t regret selling in 2015 in the slightest. Since we sold in 2015, only 2 condos (that I am aware of) in the local area have sold for higher. Selling when we did allowed us to purchase our current home when we did, which has been the best decision. For our situation, I think we timed it about as well as could have hoped for.
LJ Lyon says
The moment that I first saw you, you were looming at the end of the cul de sac, bright and inviting. There was something about you, maybe it was in the two and a half car garage or the way your exterior lights were on a time clock; I knew that there was this undeniable attraction that I felt for you.
I was shy, nervous, and I hesitated just a little bit before I made an offer on you. We were strangers, and when the owner said yes, I swear my heart skipped a beat. Ever since that night, I have known that we were destined to be together and not a mortgage payment goes by when your love does not prove me right. I love you, much more than you can imagine, and I just want you to stay mine forever.”
We wrote a love letter for the house we purchased a year ago, and later heard it helped us overcome many other bids. (We were later able to negotiate down quite a lot during inspection anyway).
Sample letters our realtor provided made us gag. They would include a family photo and say things like “our little two-year old boy wants to be an astrophysicist someday!” I felt they were too mushy.
We knew the owner had lived there for 13 years and improved the house a lot. So instead, we talked about how we could tell the house was maintained with care, how unique it was and how beautifully it was designed. We stuck with flattery rather than talking too much about ourselves.
Then we moved in and renovated the whole place!
Financial Samurai says
Sounds good. Did writing about the two-year-old make you go because you don’t have children?
This is a great idea and something I wanted to do (we moved to WA and have just barely begun the house-searching process), but the comment from the WA realtor above has me re-thinking this.
Personally, my parents received a love letter from an adorable family that was just like us, but 20 years later. Husband, wife, little girl (exact set up as my family) –but my parents ending up going with the higher offer from some flipper who let our family home go into ruin because he bought at the height of the market and couldn’t sell it.
I was disappointed, but not my house or my money! I think the offer my parents got from the ‘love letter’ family was asking price, and the offer from the flipper (no letter) was $50k more. So clearly, that made a difference to my parents.
So I’m on the fence about writing a letter! I’ll see if our realtor discourages us (since we’re in WA state) and go from there. Love this idea overall though!
Financial Samurai says
Gotcha. In a way, your parents saved the lovely family since the market went down after. But maybe not, since the family probably ended up buying another house during that time.
What percentage more is $50K more? As a seller, I would just counter the love letter buyer and try to bring them up to other competing offers.
Let me know what your realtor says about love letters.
RE: working 25% harder — in my industry town (LA) everything shuts down from Christmas to New Year’s. I remember an indie filmmaker speaking on just this thing. He got A List stars for his quiet, one location drama, just by shooting the last two weeks of the year.
Some dude says
Hmmm, if I was the seller receiving that letter, I’d simply conclude that you RELLY want the house….; And just hold out for you to raise your bid because doesn’t sound like you are willing to walk away from the negotiations table….
Always interesting how two people can look at the same idea and see it so differently…,
Having said that, I’ll tune back in to see what happens…,
Financial Samurai says
Great feedback. And that is why buyers need to then be willing to walk away. I’ll be writing a post about how to ride a “real estate break up letter“ later.
Dave Piedrahita says
I am a Broker in Washington State and most brokerages have all but made “love letters” forbidden. The number of lawsuits has skyrocketed due to fair housing law violations. You cannot under any circumstance in a letter use any words or phrases that could be used to show favoritism to any party. example. “start a family” or “my spouse and I” we have seen lawsuits where people whom dont have a spouse or not planning kids has been awarded large settlements. Another example is saying I love that the home is right by my church, mosque, school, etc. We have seen many suits for that reason as well.
Know your fair housing laws so you dont put yourself or your clients at risk.
Financial Samurai says
Fascinating! Can you share some specific examples? Are you staying in Washington that buyers are not allowed to include a letter at all in their offer? What happened to freedom of speech and expression?
From the seller’s point of you, if he only has one offer, and the potential buyer says he really likes the house because it is close to his favorite Asian grocery store, is the seller not allowed to sell it to the potential buyer because he likes Asian food? What if there are two competing buyers, and one did not write a letter, and one wrote a letter talking about the things they like. And the one that wrote the letter was 10% higher than the other one who stayed quiet. Is the seller supposed to sell only to the one who stays quiet?
This is a great topic! I’d love to get some specific examples from you. I totally get what you’re saying because there is a no discrimination policy for landlords as well.Thx
Dave Piedrahita says
Not illegal but can easily violate fair housing laws. We are told on the buy side to not do it and on the listing side that if we receive them to tell the seller but advise them not to read them because of risk of violating fair housing act and facing legal action. Here is article copy and pasted.
Brokers Beware of the Danger of Buyers’ Love Letters (March, 2018)
Real estate brokers and agents should beware that danger lurks in a seemingly innocent
letter from the prospective buyer to a seller, professing the buyer’s desire or even love for the
seller’s property, otherwise known as the Love Letter. First, real estate licensees should not suggest
the use of Love Letters, and never help the buyer to compose or write such a letter. They subject the
buyer, seller and the brokers to potential violations of the Fair Housing Laws of the Federal, State
and local governments. Usually, Love Letters are an emotional plea, often directly or indirectly,
maybe unwittingly, mentioning or distinguishing, classes of persons protected under the Fair
Housing Laws of the Federal, State and local government, for example:
“I can see our family celebrating Christmas here;”
“My wife and I would love to raise our family in this house;”
“Our children’s pictures will line the staircase and grace all the walls of the home;”
“Our daughter loves to swim;”
“Our son is the star of his basketball team;”
“We want to send our children to the parochial school and church in the neighborhood;”
“The house has a great dining room just right for our large Italian family dinners.”
All of the above statements demonstrate characteristics of a potential buyer and how he or
she views the property that is being marketed. They also demonstrate characteristics that distinguish
a potential buyer from the universe of other buyers that may be potentially interested in the same
property, but may not have children, do not practice the same religion or may have disabilities that
prevent their children from athletic activities. If such a letter is a contributing factor to the seller’s
acceptance or denial of the purchase offer, it may be a Fair Housing Law violation.
The seller and the buyer’s broker and/or agent need to be aware and raise Fair Housing
concerns with the buyer. The buyer’s broker and/or agent should not read or accept the Love Letter
drafted by the buyer. Similarly, the listing broker and/or agent should discuss potential liability at
the listing interview and not deliver any Love Letter to the seller. The listing broker and/or agent is
cautioned not to accept such letters from buyers. The listing broker and/or agent and the buyer’s
broker and/or agent should not be involved in the delivery of Love Letters to the seller. The listing
broker and/or agent and the buyer’s broker and/or agent should not have any knowledge as to the
contents of such letters. The listing broker and/or agent and the buyer’s broker and/or agent should
consider having the seller and buyer’s attorney review the Love Letter and keep a record, showing
good faith efforts to advise against this practice.
So why the fuss about such seemingly harmless letters? The Federal Fair Housing Act,
otherwise known as Title VIII of the Civil Rights Act of 1968, as amended, established meaningful
Federal enforcement mechanisms. It outlaws:
1) Refusal to sell or rent a dwelling to any person because of race, color, religion, sex,
familial status, national origin or disability.
2) Discrimination based on race, color, religion, sex, familial status, national origin or
disability in the terms, conditions or privileges of sale or rental of a dwelling.
3) Advertising the sale or rental of a dwelling indicating preference, limitation, or
discrimination based on race, color, religion, sex, familial status, national origin or
4) Coercing, threatening, intimidating or interfering with the person’s enjoyment or exercise
of housing rights based on discriminatory reasons or retaliating against the person or
organization that aids or encourages the exercise or enjoyment of fair housing rights.
The New York State Human Rights Law at section 296 prohibits discrimination in the sale,
rental, lease or otherwise deny or withhold a housing accommodation based on the same classes
identified in the Federal Fair Housing Act, noted above, and expands the protected classes to
include: race, color, creed, sex, familial status, national origin, age, sexual orientation, gender
identity, military status, marital status, and disability. In all cases, discrimination means treating
someone differently because of one of these protected classes.
The New York State Human Rights Law expressly prohibits real estate brokers, real estate
salespersons or their employees or agents from refusing to sell, rent or lease any housing
accommodation, land or commercial space to any person or group of persons or to refuse to
negotiate for the sale, rental or lease of any housing accommodation, land or commercial space to
any person or group of persons because of the above noted protected classes. New York law also
prohibits real estate brokers, real estate salespersons or their employees or agents from printing or
circulating or causing to be printed or circulated any statement, advertisement or publication, or to
use any form of application for the purchase, rental or lease of any housing accommodation, land or
commercial space, or to make any record or inquiry in connection with the prospective purchase,
rental or lease of any housing accommodation, land or commercial space which expresses, directly
or indirectly any limitation, specification or discrimination as to any of the above protected classes.
It is also an unlawful discriminatory practice for any person to aid, abet, compel, coerce or attempt
to do any of the acts noted above prohibited by the New York Human Rights Law. In addition,
many counties, cities and other local governments have established other protected classes, such as
source of income or citizenship status of the prospective purchaser or tenant.
Also, the New York Real Property Law governs the conduct of real estate brokers and real
estate salespersons and prohibits them from engaging in “untrustworthy or incompetent” behavior,
which has been held to include discrimination against people within the above protected classes.
The New York State Department of State has regulations that specify that discrimination is
unlawful, and clarifies that a finding of discrimination by a court or agency against a real estate
licensee will constitute evidence of untrustworthiness in any subsequent New York State
Department of State disciplinary proceeding. In addition to any fines or penalties imposed by a
court or governmental agency, the New York State Department of State has announced that it will
seek to impose sanctions, including but not limited to, license revocation or suspension, fines and
restitution against any licensee found to have engaged in discriminatory practices or conduct.
Based on the above hypothetical Love Letter, by way of example, and not as a limitation, a
single non-Christian mother, with a disabled child, who otherwise has the financial ability to submit
a competitive or better offer, may be aggrieved and entitled to a claim for discrimination under the
Federal, State or local Fair Housing Laws, against the seller, the buyer and their real estate
brokers/agents, if they participated in delivering or worse, prepared such a Love Letter. Real estate
brokers and agents must be on guard not to promote or participate in Love Letters.
Financial Samurai says
Cool. Can you share with me specific examples that you’ve been through where there was a discrimination lawsuit? And if you don’t have a specific example of what you went through, do you have an example that was publicized in the press for us to take a look at?
In Washington, would you advise your seller to accept the $500,000 offer with no letter, versus a higher offer (eg $550,000) with a letter due to fear of discrimination?
I would imagine that it is very hard to prove discrimination when there are so many variables at play. In fact, a well-crafted letter would be a reason in a court of law as to why the seller would have Made a non-discriminatory choice.
From the buyers perspective, I just don’t see any downside. The seller can ignore if they wish and that’s fine.
Dave Piedrahita says
I have not had a legal suit personally(knock on wood) I’m saying due to the rise in suits nationwide all brokerages attorneys are advising strongly against having buyers write them or sellers read them. As their fiduciary I have to warn them of the risk this puts them at.
As far as having multiple offers some with and some without letters, my advice would be to look at all the offers and not to read the letters to avoid putting them at risk.
As far as proving what influences a seller. If a court subpoena’s the seller read letter which by definition is a letter of persuasion and it contained verbiage that violated the fair housing act that in itself is a violation.
I am not agreeing or disagreeing but am just making sure that I am protecting my clients the best I can. Same as if someone asked me what type of people lived in a particular neighborhood or community, I cannot answer that without losing my license if reported.
I haven’t looked up any particular suits. you will have to find that info online.
Ive had people insist on the letter and I basically had to proof and remove any verbage that could be a letter. I agree that the “love letter” can humanize the offer and give an edge in some instances. What I now try and do is offer the offer in-person to the listing agent and their seller to bring a more personal touch. Like the old days.
Financial Samurai says
Fascinating. So you have personally never experienced a legal issue nor are you aware of any legal issues of discrimination based on a real estate love letter that is public.
Given this data, I would argue that it would be a waste of money and impossible to improve that the seller discriminated against buyers after writing a letter.
What are the exact downsides of a buyer writing a letter in your opinion?
Financial Freedom Countdown says
Sam, I also offered a price ending in 6 when buying my primary since that is considered lucky in Chinese. Not sure if being sensitive to the cultural aspects helped me get my house; but every bit counts like you say.
I found your letter interesting because in the past, I sort of played good cop/bad cop with my broker. My letter was always about feelings and connection with the property while my broker pushed hard on the numbers and brought up things like repairs and problems.
Here’s one of my older ones. The seller was moving to a retirement home and feeling a bit guilty about abandoning her current tenants who were paying extremely below market rent (2/3 turned out to be crazy and litigious – lessons learned):
Dear Home Owner,
I first came across XXX Avenue when I was a graduate student at UC Berkeley, and I distinctly remember being struck by the leafy street full of beautiful shingled homes. It has been many many years since then, but when I began looking for a home to settle into and saw the address of your property, it triggered a memory of that quiet lovely afternoon.
XXX is just as beautiful as I remembered, and your home a very fine example of the houses that line the street. I walked in and felt the quality of a house that has been well lived in by good people; I looked up at the box beams and the curve of the ceiling in the rear cottage and thought to myself that I had found a place to settle into for a long stretch.
It seems a stroke of luck that I came across your property since I had such specific and intangible requirements. As a woman on her own, I was looking for a multi-unit property to offset the cost of a mortgage over time with an owner’s unit tempting enough for a long-term commitment. I also found it reassuring that you found good people to be your tenants and neighbors (I had gathered from the small peek I got into their lives during the open house).
It is clear that over the years, you have fostered a community of neighbors and tended to your home with care. It would be a privilege to be able to carry on this tradition and make my home on a street I fell in love with so many years ago.
Thank you so much for the opportunity to present this offer.
Everyone’s different I guess. I would feel I was being played if someone sent me a lowball offer with a schmucky letter. It would likely piss me off and send me to another buyer. But— I recognize we are all different and motivated differently.
Financial Samurai says
For sure. Some people are not good communicators, don’t have many feelings, might not have found love, don’t have a family and don’t have much empathy. Some people are just naturally angrier at everything, including politics, work, etc.
So in your case, the real estate love letter will not work, as you have mentioned before.
Are there any things you’ve done in the past to create a connection to get ahead?
I agree with you Ccjarider. If I’m selling a property that’s reasonably priced, it doesn’t help if I receive a lowball offer with a love letter. It has nothing to do with empathy, politics or love. Show me the money! A full priced offer with proof of funds and pre-approval letter will trump a 10% discounted cash offer with a love letter. I don’t fault a potential buyer for trying though.
Financial Samurai says
But all else being equal, would it trump an offer that was 1% below the competing offer if a real connection was made?
If the delta was 1% and a real connection was made that’s a plus. What it really comes down to though is a cash deal that’s 1% below the highest offer.
I find your response interesting in that I guess you are assuming because I would find the schmaltzy love letter COMBINED WITH A LOW BALL OFFER to be unappealing, that I cannot experience love, empathy or connection. That’s a stretch assumption on your part but whatever.
To answer your question about connections – When it comes to purchasing, any “connection” comes from the fact that I am a strong position, financial buyer offering low risk timing AND I am offering a reasonable price for property based on research. Pretty basic really.
As a seller, my “connection” is that property being offered is reasonably priced based on same assessments done in the purchase decisions. I will not hang a shingle out with a high #, hoping some naive buyer comes along. It seldom happens although anything is possible.
For the most part, the market decides pricing and I am not interested in emotional drivel for what is in the end, mostly a business decision. While I have no problem knowing the buyer or sellers story, it has little emphasis in decision making.
My big hangup with your article is that you are combining a schmaltzy letter with what appears to be an unreasonably low offer. One could say, you are attempting to use the heart to rip off someone.
But as stated earlier, we are all different. I do enjoy and find value in most of your articles and I appreciate what you do.
Financial Samurai says
Cool. Every situation is different. I’m not implying that you cannot feel, just that you feel differently than others who would appreciate the personal touch.
Realtors and homeowners get the listing price wrong quite often. It’s the reason why there are stalefish listings and some great deals to be had.
Sellers often think their property is worth more than it really is due to an emotional attachment. I’m telling folks to not underestimate people’s emotions.
There’s no downside in making an effort to connect. It works with relationships, work, promotions, joining a club etc. It can work w/ RE too.
I’d be interested in you writing about your holiday “crank up,” because that’s worth an article all on its own. I have a friend in the Bay who writes a novel every November and there does seem to be more time towards the end of the year.
Financial Samurai says
It’s the simple act of working while others are playing. It is like hitting the three after your opponent misses an easy dunk.
Do this for a long enough time. And you blow the game wide open.
It has never been more clear to me how easy it is to get ahead in America if you can work while others are playing.
Thanks for sharing the actual letter and a breakdown of what to put into one and the rationale behind it.
I have to admit, I have never written a letter or received a letter when buying or selling my homes but if I was a seller, I certainly would give points to someone who did which would give them the edge over others.
You better be careful Sam or this little secret of yours will spread and everyone will be doing and the advantage is lost :) LOL
An applicant for my rental property sent me a love letter with a photo of her family. I appreciated the thought and felt better about leasing to a single mom with kids. All other things being equal, I rented it out to her.
She was a terrible tenant :(
Financial Samurai says
Ah, bummer. What happened?
Unfortunately, this also happened to me!! As a single mom, I wanted to rent to a single mom. My tenant was a single mom and her college age kids also lived in my brand new property for 4-5 months, trashed it, made holes in walls, broke many things, even the cabinets…. and stopped paying me rent. I had to evict. :( luckily it was out of state, and it was easier to evict.
Financial Samurai says
Bummer. How effective was
Their love letter in swaying you to choose them?
Sweet! What an awesome letter. If I was the seller and got that letter I’d want to sell to you too. I totally believe in the power of building a connection with the seller. It’s often a very emotional process parting with a piece of real estate. Sometimes sellers don’t even want to sell but they need to for financial or practical reasons and showing sensitivity and empathy towards their feelings can go a long way. Best of luck!