Writing ‘Love Letters’ Can Give Home Buyers an Edge—and Open the Door to Discrimination

This story was published in partnership with Texas Monthly.

In 2016, when Gisella Olivo and her husband walked into a four-bedroom house in downtown McKinney, about thirty miles north of Dallas, it immediately felt like home. Just past the front door was a baby grand piano; her husband, a local musician, saw it as a sign. Olivo, who works as a real estate agent selling houses across the metroplex, went home and wrote a handwritten letter to the sellers. She described how her family would take care of the historic house, how involved they were in the community, and how they could imagine their grandchildren visiting them there one day. “I just wrote what was in my heart,” she says. 

After their offer was accepted and they closed on the house, Olivo asked the seller’s listing agent why the sellers had chosen them over the other family who had submitted an offer. “She told us that they were enamored with us from the day they got the letter.”  

For years, eager home buyers have made emotional appeals to sellers in the form of personal letters. It can be an effective way to distinguish themselves, and their offer, from similar bids. In 2019, the real estate brokerage company Redfin analyzed data on thousands of offers submitted over two years to see which of five strategies most affected buyers’ odds of winning a bidding war. Writing a personal letter increased the success rate for “competitive offers” by 59 percent, making it the second-most helpful strategy after offering all cash.

Then the pandemic hit, and the real estate market went haywire. By July 2021, nearly three-quarters of houses in Austin were selling for a higher amount than the asking price. Statewide, the median home price had jumped nearly 20 percent from the previous year. In this frenzied environment, Olivo says, desperate buyers are increasingly submitting personal cover letters alongside their offers. “I think at this point, because the market is so hot, buyers are doing anything they can just to get a house,” she says. “If it makes even a 1 percent difference, then why not?”

Increasingly, though, realtors are recognizing that these letters can open the door to discrimination, allowing sellers to choose buyers who are similar to them. In October of last year, the National Association of Realtors (NAR) issued guidance warning that so-called love letters could violate the Fair Housing Act, which prohibits discrimination in the sale, rental, or financing of a home because of race, religion, sex, or familial status, among other characteristics. “This issue has been bubbling up for a while,” says Bryan Greene, vice president for policy advocacy at NAR, who wrote the guidance. “People in the real estate industry in particular have expressed concern that buyers’ love letters might lead some sellers to pick and choose potential buyers for discriminatory reasons.”

As word spreads about the letters’ pitfalls, some sellers simply choose not to read them. That’s what Lizz Restat did when she put her Austin home on the market in February after accepting a new job in Denver, Colorado. Austin’s real estate market was in the midst of an unprecedented boom: The median home sale price in Austin had jumped to $505,000, a 26 percent increase from the same time last year. (It’s since skyrocketed to $600,000.) Restat asked her agent not to show her the letters. She was mindful of the potential for discrimination, but that wasn’t her top concern. Mostly, she didn’t want to be swayed by a story from someone she sympathized with. 

“I thought, ‘I’ve got to make as much of a business decision as I can,’” Restat recalls. She could imagine hearing from a single mom, someone like herself, and accepting $20,000 less than an offer from another buyer. “I know myself, and I know my [tender] spots,” she says. 

In June, Oregon became the first state in the country to ban buyer letters. Authored by state Representative Mark Meek, a Democrat, the law directs real estate agents to reject “any communication other than customary documents in a real estate transaction, including photographs, provided by a buyer.” In 2018, Meek, a longtime real estate agent, served on a task force that studied racial disparities in homeownership. He learned about implicit bias, which can drive neighborhood segregation, and realized that “every letter could be a potential violation of the Fair Housing Act,” he says. “When you look back at the redlining of the past, these love letters to the seller are unfortunately coded to perpetuate discrimination.” 

The racial disparities in homeownership are stark. In 2021, according to the Census Bureau, 74 percent of white families owned their own homes, while only 49 percent of Latino and 45 percent of Black families did. Because owning a home that appreciates over time is, for better or worse, the primary way Americans have generated wealth since the 1950s, this divide contributes to a persistent wealth gap between white homeowners and Black and Hispanic renters. According to the Federal Reserve, the median net worth for a white household is $188,200, compared to $24,100 and $36,100 for Black and Hispanic households, respectively. A 2015 study from Brandeis University and the liberal think tank Demos concluded that “eliminating disparities in homeownership rates and returns would substantially reduce the racial wealth gap.” 

The possibility that buyer letters might contribute to this divide, however, hasn’t gotten much consideration at the federal level. Before he took his job at the National Association of Realtors, Greene oversaw fair housing enforcement at the U.S. Department of Housing and Urban Development (HUD). He says he’s unaware of a single complaint filed with HUD that specifically references buyer letters. “No one at HUD ever talked about this issue, no one in the civil rights division at the U.S. Department of Justice ever talked about this issue. So it really has been a debate among real estate professionals.” 

For years, Audriana Edwards, a realtor in Lubbock, wrote letters for her clients, based on personal details they had shared with her. After she saw the guidance from NAR, she told her clients that if they wanted to submit a letter, they’d have to do it themselves. But she’s skeptical that this change will do much to reduce discrimination. If a seller wants to choose a certain kind of buyer, she says, they’ll find a way. “Any time there’s a showing, there’s a Ring camera on the front door. You know exactly who’s coming through your house,” says Edwards, who is Black. “Discrimination in real estate happens every day, in many different ways. It could be from the camera, it could be from the letter, it could be from the person dropping off their earnest money.”

It could be as simple as seeing a buyer’s name. In 2020, a Massachusetts couple sued a homeowner in federal court alleging discrimination based on race after the seller saw the buyer’s name for the first time on a purchase and sales agreement and asked her agent “if one of the buyers was ‘Black,’ due to the buyer’s name,” according to the court filing. When the seller’s agent responded in the affirmative, the homeowner stated that “she refused to sell the property to an African American and was backing out of the deal.” The case is pending settlement. 

 Christina Rosales, deputy director of the fair housing nonprofit Texas Housers, echoes those concerns—but notes that the issue is complex. “The practice is sort of a double-edged sword,” she says. “Yes, there’s a major fair housing concern, but it could also function as a defense from investors swooping in and buying properties or entire subdivisions, which is happening increasingly and continues to lock out people with moderate incomes, many of whom are people of color, from buying a house.”

Lilly Rockwell, an Austin realtor, is skeptical that buyer letters can make or break a deal. And, she says, it’s not difficult for a seller to ensure that their home is going to an occupant, rather than a developer—the two agents can simply talk to each other. She says that while she’s never encountered overt discrimination based on a letter, she does encourage her clients to be aware that they might do it unconsciously. “What I do run into …  is this impulse to pick people who are like you,” she says. “‘Oh, I raised a family in this house, so I want to pick another family.’” 

Even if a seller isn’t engaging in active discrimination, though, buyer letters work on parts of the brain that affect how individuals determine value in transactions. According to Scott Huettel, a Duke University neuroscientist, social and emotional factors often influence what would otherwise be purely financial decisions. “We know that people don’t merely value economic things,” Huettel says. “If that was the case, why would we ever tip? We’d say, ‘I don’t care, I’ll just keep my money.’” In a study, Huettel and his team asked participants to make decisions while in an MRI scanner. They found that added economic value and human connection light up the same part of the brain (the temporoparietal junction), suggesting that both factors play a significant role in our choices.

In early 2020, AJ T. Cole and her husband started looking for a home in Garland while she was pregnant with twins. Shortly after the twins were born, the couple found their perfect house. After submitting an offer, Cole says she was “persistent” in following up with the owners. “I can picture us pushing the stroller through the quaint neighborhood and teaching our kids to ride their bikes in that long driveway,” she wrote in a letter, which she dropped off in person, along with a box of Tiff’s Treats cookies and her newborn twins in tow. It turned out that the sellers also had twins. She doesn’t know for sure why they picked her, but her agent told her that the sellers “were really happy that the offer with the twins won.” 

Huettel isn’t surprised by this story. “If I humanize somebody, and I’m thinking about them as an individual with real goals and desires, those regions of the brain become more active,” he says. Discrimination can happen with or without a letter—but the letters are a strong way for potential buyers to humanize themselves to the seller, which, in a competitive market, gives them a chance to add some additional value to the transaction. “When somebody says, ‘I’m like you were when you bought the house, I have young children like you had young children, we want them to grow up in this place,’” the same parts of the brain that recognize financial value also activate, he says.

The converse is also true, Huettel says: “If I think about someone in a dehumanized manner—say they’re part of an out-group, and that could be because of political demographics, race, gender, all kinds of other things—we know that that actually diminishes that [brain] activity.”

But even a heartfelt letter can’t compete with $100,000, as Hays County resident Bianca (who didn’t want to share her last name) learned this year. She and her husband, Justin, got married in March and immediately started going to showings and putting in offers. They felt a lot of urgency—Bianca, a first responder who works the night shift, was tired of trying to sleep during the day in their efficiency apartment while Justin did his work-from-home job for the state right next to her. The couple put in an offer on the first home they saw, which Bianca had fallen in love with. She wrote a letter to the seller, telling their story. She quickly found out that cash was king—cash offers with waived contingencies, even better. “The house was listed at $300,000, and we offered $315,000. It ended up going for $415,000,” she recalls. “I wouldn’t care about a letter, either.” 

After their fourth rejection, she stopped writing love letters. “We kept getting outbid by so much money,” she says. “It was really heartbreaking and stressful.” For the next 26 houses the couple made offers on, they did their best to get to the top of the seller’s list by offering 20 percent above asking, waiving inspections, and lowering their expectations. They’d dreamed of buying an acre out in Hays County near Justin’s parents’ house, with the freedom and space to live the way they liked, but they were starting to feel desperate.

Eventually, she found a house that made her decide to get her pen and paper back out. Bianca noticed in June that a property around the corner from her apartment, in a house that had previously been owned by a Vietnam War veteran that she knew, was listed for sale. She knew that the owner had died earlier in the year. With no family, he’d left the house to a friend who had helped take care of him in his final years. She’d always been intrigued by the quirky property, with its large yard and unusual touches (she was surprised, upon touring the house, to find two gun safes built into the foundation). So once again she wrote to the seller, telling her the story of why she wanted this house. Unlike her previous letters, which she describes as “very much kissing their ass,” this one was authentic, she says. “With the last letter, I was like, ‘OK, I’m going to be real with you. I don’t care about the updates. The other letters were very superficial. It felt good to just be honest.” 

“I told her that we lived down the road, that we were born in Texas, that we both went to Texas State, that we were Texans through and through,” she says. She wrote that she knew the previous resident. “I told the lady how I would wave to him on his walks when I was driving back from work, and that I was friendly with his cat, Tom.” The house was a few blocks from her in-laws’ home, and she wrote that they wanted to be close by to help take care of them as they got older. 

“She told me that she had gotten multiple offers on the house, way over asking, and definitely more than we offered,” she says. “But she said that she really appreciated that we wanted to live close to our parents, because that’s what she wants her kids to do.” The seller agreed to their terms—an offer contingent on appraisal, which Bianca says is increasingly rare in the area—and the couple closed on the property at the beginning of August. They moved in that same day.