A Message from the President

President's Message - A Note From Amy MacMillin

Happy May, I, like a lot of you, are very busy; so I am cheating on my monthly letter and instead sending you some excellent guidance on the Love letters; this is from the WRA.

Dear Seller Letter Handout In a competitive market where properties are scarce, buyers employ various strategies to win the seller over. One of the most controversial is the inclusion of a “pick me” or “Dear Seller” letter, describing the reasons, apart from the terms and conditions of their offer, why the seller should select their offer. Dear Seller letters may include personal messages, videos and family photos submitted to the seller along with the offer. The use of these letters presents the risk of liability for a fair housing violation if the seller chooses an offer based upon the buyer’s race, family status, sexual orientation, religion or another protected class under fair housing laws. A Dear Seller letter can trigger implicit bias, where a seller might prefer a buyer’s offer based on a “feeling” or something the seller “just likes” about the buyer. In some cases, sellers may knowingly choose a buyer based on protected class characteristics revealed in the buyer’s communication, a clear fair housing law violation if it can be proved. Accepting an offer based on a buyer’s characteristics and not the merit of the offer likely violates fair housing law. The WRA has created a handout for members to use when they are faced with these situations. See “‘Dear Seller’ Letters: Competitive Edge or Fair Housing Violation?” at www.wra.org/dearseller.

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?
• WRA September 2020 Legal Update, "Multiple Offers and Love Letters"