Buyer Letters...What You Don't Know May Hurt You

Jeff Dowler CRS .....I had no idea I was pickded up by Inman!  I must go find that!

While the fair housing is hard to prove, that does not stop someone from bringing the case to begin with.  And the cost of defending one is not cheap. Plus, if a Seller is sued and their agent did not warn them about the risk, then the agent could be on the hook to the Seller.

Thanks Jeff!

William...exactly right...and why risk it?

Imran Mohamed - Broker Associate .....it's not about viewing the property or presenting the offer.  Refusal to sell based on these protected classes is a violation. That's the same as picking one offer over another based on one of thse protected classes.

We are talking in hypotheticals here. It depends on what the letter says.  But IF the Seller accepted an offer, accompanied by a letter, and that letter mentioned a protected class - maybe it's a married couple with kids, maybe they mention they're of the same religion as the Sellers - and there was also another offer or offers - those other offers maybe did or didn't have letters but maybe one was from an unmarried couple or a single person and maybe one just happens to be of a different religion.  And - then the offers were identical or maybe even the offer without the letter was even higher - yet the offer that had the letter was chosen - right there is your possible Fair Housing violation.  

If the buyer whose offer was not chosen feels that they have been discriminated against because they were not married or didn't have kids (or whatever may have been on the list), they can go to HUD, claim a Fair Housing violation and bring a complaint against the Seller, the listing agent and the buyer agent.  They do not have to prove intent in order to bring a claim.  The letter will be subpoenaed for evidence.  Even if the case is dismissed - the cost of defending it will be pretty high.

True,the Seller can sell to whomever they wish - but not because of someone's race, religion, color, national origin, sex, family status, or disability.  In Massachusetts refusal to sell cannot because of age, sexual orientation, marital status, veteran status, ancestry or source of income.  They can't sell to a white family because they are white or not choose a Latino couple's offer because they are Latino.  They can't choose a married couple because they are married or not choose an unmarried couple because they are not married.  They can't refuse to sell to a same sex couple because they are gay or refuse to sell to someone because he or she is Italian.  These are just a few examples.  

Once those letters start mentioning any one of those items it gets into dangerous ground. The letter has to be completely innocuous. Without the letter, it is more plausible that they picked that offer just because it was a better offer or had better terms or for some other reason - compassionate grounds as you say even.    

I just had an agent ask me last week if my buyer who had just submitted an offer was married "because the Seller would want to know." Really?? What business is it of theirs if my buyer is married or not?!  It smacks of a Fair Housing violation.  

Christine....I think just making sure the letters don't cross the line or disclose more than you'd want to disclose is the key.  I write an introduction with my offer anyway highlighting the key facts - downpayment amount, strength of preapproval - things that point to the strength of the offer.

Geoff ONeill .... As I stated a few other times in the comments, I was at a CE class where the longtime, certified instructor raised this issue. You're right about the fiduciary duty but I see listing agents breaching this more often than I'd like to think. And there may be something else that makes a buyer think there was some violation. And just because you're not caught does not mean it's not wrong. If what my client asks me to do is a violation of the law, I do not have a duty to do as they ask either.

Geoff ONeill ....my point being that there is nothing wrong with the letter but it's what some buyers put in them that can be problematic. And Buyers do need to be warned - and then left to their decision - that letting the Sellers know how much they want the house can backfire.  It can go either way.  As long as my buyers are informed and there are no Fair Housing issues then I have no problem with them.

 Tni LeBlanc  ....I wish there were better education on it too.  I hadn't thought of a number of these issues until I was at a class that covered Fair Housing.  Thanks!

I hadn't thought about it too much either Liane Thomas - Corona & Riverside Real Estate until I attended a seminar on Fair Housing.  The more I thought about it though, the more I realized that some of these things could be violations.  I guess if I were a listing agent I may tell the buyers agent that I was submitting the offer without the letter - as long as you treat all letters the same way.   

Thanks Hella and Sussie!