Love letters have become a “ hot topic” lately in real estate.
If you’re not sure what they are , I will explain more here.
Love letters started to surface when the market became super competitive as it shifted to what we call a “ Seller’s Market” A seller’s market tends to occur when inventory is low and there are multiple buyers looking for homes. Combine this with historically low mortgage rates and you now have a completely nutty situation.
When it came to a home hitting the market over the last few years, it was very typical to have multiple offers the first day. Some regions could see as many as 60 offers on one home in the first 24 hours !
Love letters were a strategy used to give one buyer “ leverage” by explaining why they were the perfect buyer for the home and why the seller should “ choose them” over other offers.
Now, let’s think about this. A letter is submitted to a homeowner with a very detailed description of the buyer and why they should be chosen over all other offers.
Can you see where this might be going down a risky path? It was initiated certainly without any ill intent and in the best interest of buyer clients with agents doing anything that they could to get their clients the home.
If we are trying to keep the real estate world a fair playing field for all, these love letters could potentially cause major problems. Some buyers could feel that they did not have a fair chance if love letters swayed the seller to choose someone else.
Many offices are now instituting policies that advise their sellers to not accept love letters and to explain the potential ramifications of them.
As real estate professionals , we have to conduct our business to the highest standard. When we see problems with the market or concerns about fair housing, we need to stay current with the times. It is our job to educate our clients how to navigate the real estate world with integrity and honesty.
States such as Oregon are actually now making it law that these love letters not be submitted under any circumstances. To read more about this see the following link
https://www.floridarealtors.org/news-media/news-articles/2021/07/buyer-love-letters-sellers-now-illegal-oregon#:~:text=Oregon%20is%20the%20first%20state%20to%20make%20such,out%2C%20especially%20if%20the%20seller%20received%20multiple%20offers.
This was one of my more serious posts but very relevant to the current times. If you would like more information on this topic feel free to reach out to me.
Tanya
“Play fair, be prepared for others to play dirty, and don’t let them drag you into the mud.” – Richard Branson