Why realtors warn against writing ‘personal letters’ to home sellers – and what they recommend instead

• In a hot housing market like the US has right now, some buyers write "personal letters" to sellers.
• The goal is to stand out, but letters can violate fair-housing laws and lead to discrimination.
• Realtors told us how they advise buyers who want to write letters.
• See more stories on Insider's business page.

With fewer homes for sale and bidding wars more common, buyers are looking for creative ways to stand out in today's super-competitive real-estate market. One tactic many are embracing is the personal letter, in which buyers hoping to spark an emotional connection explain to sellers how they envision themselves living in the home.

Sending a "love letter" may seem harmless, but the National Association of Realtors advises against it, as the approach could potentially violate fair-housing laws and lead to discrimination. Oregon recently went as far as banning home buyers from sending personal letters to sellers.

"Anytime my buyers ask if they should include a personal letter with their offer, I advise against it," Jason Gelios, a real-estate agent with Community Choice Realty in Southeast Michigan, told Insider. "You never know what type of seller you're dealing with. If a buyer includes certain things about themselves in their letter, it could backfire on them. Sellers could judge them unfairly based on that information."

Disclosing that information in a letter isn't always conscious, either. If you mention wanting to celebrate Christmas with your family or disclose the pronouns of your spouse, you've already told the seller a lot of information.

Plus, letters alone rarely help home buyers nab their dream homes. Gelios said in a seller's market, like now, buyers are better served when they offer a competitive price and better terms that appeal to the seller.

Why personal letters might violate the Fair Housing Act

The Fair Housing Act protects individuals from discrimination when buying or renting a home, getting a mortgage or obtaining housing assistance. The law prohibits discrimination based on race, color, national origin, religion, sex, familial status, and disability.

When writing personal letters, potential home buyers often identify who will be living in the home and provide other details that could trigger a fair-housing law violation, said Trevor Halpern, owner of Halpern Residential real-estate group in Phoenix, Arizona. Writing letters and creating videos has been popular with home buyers in his area this year.

"Most of our buyers have heard that these are good tools," Halpern said. "These are ways to set yourself apart. And these are ways to really tug at the heartstrings of the seller and to make it so that you are standing out in the sea of offers."

But most real-estate agents have put the brakes on the practice lately. In the Phoenix area, many brokerages "put their collective foot down and said, 'You can no longer write these. These are potentially violations of housing laws,'" Halpern said.

At his brokerage, agents have been instructed not to review any offers that include personal letters and to ask for the offer to be resubmitted without it.

"One of the issues I see with buyer love letters is that it could put not only the buyer and seller in a tough spot legally but also the real-estate professional who allowed it to happen," Gelios said. "Should the seller not choose their offer for whatever reason, even if it's not related to the letter, the home buyer could consider that discrimination on the seller's part."

Though, he said, proving discrimination in these cases would likely be difficult since sellers have the right to refuse an offer on their home for any reason.

Still, the National Association of Realtors issued guidance in 2020 about the potential liability of love letters and urged real-estate agents to avoid helping their clients craft or deliver them. The U.S. Department of Housing and Urban Development also says fines for fair housing violations start at $16,000.

Leave out personal details if you're set on sending a letter

Not everyone agrees that buyer letters are problematic. Matt Dolan, a real-estate broker at Sagan Harborside Sotheby's International Realty in Marblehead, Massachusetts, said he doesn't use it as a home-buying strategy but also doesn't discourage buyers from writing letters.

"It depends on the situation," he said. "When it comes to writing a letter, some people feel strongly that they want to express themselves. There's room for style in real-estate transactions, and I think if a buyer wants to express themselves, that's great."

However, Dolan encourages buyers to avoid revealing personal details about race, familial status or other classes protected by the Fair Housing Act. The most effective letters focus on a potential buyer's connection to a specific aspect of the property.

Letters make an impression on some sellers, but not everyone. Dolan said in his area, some sellers like to know that they're not selling their home to a developer who may knock it down and build something new. So, love letters making it clear that the buyer intends to live in the home can help their offer stand out.

"But, the money's got to be there, too," he said. "No seller is going to say, 'Oh, what a cute couple. I'll take this offer that's substantially lower than the other one.' No one's going to do that."

Price and terms matter most to stand out in a competitive housing market

"I have never seen a buyer love letter ever sway a home seller in my career," Gelios said. "It's not to say that it hasn't anywhere else. I'm hard-pressed to see this type of tactic be effective."

Letters might even come across as desperate, which could harm negotiations. "If I'm a home seller and a buyer sends me a letter of desperation that they want the house, I can counter offer and pretty much get what I want," Gelios said.

In the end, price and terms are what sell homes, Halpern said. For example, offering a price competitive in that market, not asking for repairs, waiving contingencies, paying the difference if a home appraises for lower than the sale price and giving the seller extra time to move out are ways to help bids stand out.

Communicating agent to agent is a more powerful tactic than sending a letter. Halpern said that creates an opportunity to ask questions about what sellers are looking for, what other offers look like and what buyers can do to stand out.

"If you just take the time as a practitioner to get a sense of what the competition looks and feels like and what truly the sellers are looking for - not necessarily what kind of buyers they're looking for, but what they're looking for in an offer - you can put together a very compelling offer without having to run afoul of any of these fair housing laws," he said.