In today’s tight real estate market, some people have turned to crafting personal letters to their dream home’s sellers in hopes of tipping the scales in their favor. Unfortunately, “buyer letters,” as they’re called, could actually lead to a housing discrimination lawsuit for the home’s seller.
“Fair housing laws prohibit housing discrimination based on race, color, religion, sex, national origin, familial status, disability, marital status and age, among other protected classes,” said Liz Keegan, director of education and outreach at the Fair Housing Center of West Michigan (FHCWM). “Discrimination is illegal not only in home sales and lending but also rentals and insurance. Offer letters, sometimes known as sunshine or buyer letters, more often than not share a lot of personal information as the buyer attempts to persuade the seller to choose them.”
The FHCWM has seen letters and social media posts that include detailed information on the potential buyer’s religion, familial status, age and marital status.
“Many of them also include photos from which information about race, national origin, skin color, disability and sex can be gleaned,” Keegan said.
Why is this problematic?
“When a seller considers personal characteristics like a buyer’s age, race, religion, whether or not they are married, whether or not they have children, etc. into decision-making, then that can create fair housing concerns,” Keegan said. “While variables like the purchase price, closing costs, home warranties, inspections, order of offers, etc. often play an important role in a decision to accept or reject a purchase offer, sometimes the buyer’s personal characteristics may also play a factor in decision-making.”
Keegan said once a seller has personal information “pertaining to protected classes under fair housing law, it could become very difficult for them to prove that the letter did not influence the outcome of the housing transaction, and, therefore, that housing discrimination did not occur.”
Walter Perschbacher, vice president of Greenridge Realty, said his firm advises sellers not to look at any buyer letters to prevent this type of scenario. “There is a fair amount of liability that can be tied to those letters. Basically, we tell our sellers it’s their option to review, but it could open them up to risk.”
How often does housing discrimination occur?
Keegan said on average the FHCWM receives approximately 5-10 complaints each year from potential homebuyers. “However, this number does not fully represent the frequency of housing discrimination in the sales market,” Keegan said.
She added, “Many cases reported by potential homebuyers to the FHCWM involve condominium sales where written bylaws, criteria or rules clearly outline discriminatory restrictions or document noticeable cause for concern. However, housing discrimination in the sales market often goes undetected and underreported. Discussions and considerations about which offer to accept or reject often happen privately, without record. Some potential homebuyers have their purchase offer rejected without ever fully learning the reason or reasons for rejection.”
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