Fair housing issues are coming to the forefront of the real estate profession and being addressed at all national, state and local levels of the industry for REALTORS. Problems with race, color, ancestry, gender, marital status, military affiliation, plus other groups of the legally protected classes continue to exist for many buyers and sellers in real estate transactions. Even appraisals have come under review.
One of the mechanisms by which discrimination may arise has been called the "buyer love letter" -- it arrives with the buyers' offer to a seller because it has been traditionally thought to help positively influence the seller into accepting an offer. They are often accompanied with photos, background stories about the buyer, and other personal history disclosed willingly by buyers who want to appear sympathetic to the seller, people who would love their new home just as much as the seller has, all designed to create a connection in order to get chosen for the contract.
This tactic has been addressed in the past, yet agents and their clients continue to submit such letters. In one state, it is now outlawed. In California they are not illegal, but agents are cautioned to advise their clients of the negative potential of this practice. If a buyer insists on submitting such a letter, they are advised to eliminate personal information (but that's what some people hope will gain traction with the seller).
Buyer Interest Letters, as they are official referred to, are considered a legal risk for unconscious or implicit bias. The buyer cannot really know what is in the seller's mind or background, and sometimes the seller doesn't either until the selection time comes, or the seller may not consciously be aware of their reasons for certain choices. Photos meant to present the buyer in a positive light may instead do the opposite, or personal buyer stories such as "I grew up in the neighborhood", "I have kids", or "my church is nearby" may elicit a negative reaction from the seller, or a favorable reaction towards a buyer but which excludes other buyers who do not have kids, a church or grew up in another state and thus cannot make any of those claims, and which in fact may violate one of the federal or state protected classes mentioned above. So this is where Fair Housing issues come into the transaction.
The only information that I advise my clients to submit with an offer is the financial qualification dealing with price and terms of the offer, which in fact is required in the contract terms anyway, because the ability and motivation to buy are the actual buyer requirements. I do not advise my buyers to write any other personal information, and in fact, the seller may have actually instructed his/her agent to not accept any offers accompanied by a Buyer Interest Letter.
So please be aware that while a listing agent must notify the seller of all offers received, per California Association of Realtors:
"Even if the agent is following the seller’s instruction, the agent should disclose to the seller that an offer was received with a buyer letter and returned to buyer or agent per the seller’s instruction. Paragraph 10C(2)(A) of the C.A.R. Residential Listing Agreement, C.A.R. Form RLA, contains a seller instruction not to present buyer letters. Only if the alternate paragraph 10C(2)(B) is checked is broker authorized to present such letters."
By carefully considering potential Fair Housing guidance, the parties will not be subject to doubts about their participation in the contract process.
Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
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