The steamy debate over real estate love letters

A Fair Housing minefield

“A lot of times,” Meek explained, “There will be a note from a buyer that will include pictures of a family. The seller could say, ‘Hey, I like this family. I’d like to sell to these people.’”

That’s quite possibly against the law, if the seller consciously or subconsciously equates “these people” as those of the same race, national origin, religion, or sexual orientation.

Though the homebuyer herself usually creates the letter, many buyer’s real estate agents encourage such correspondence.

“Unfortunately, many agents see the need to write these letters that are based on personal reasons and are emotionally driven in order to get the seller to consider their offer over the others,” said Teri Pacitto, an agent at Sotheby’s Realty in Westlake Village, California.

There’s no known attempt to quantify how often these letters are sent. But real estate agents said they are common in high-demand markets.

“I’ve seen and contributed to these letters whenever there’s a seller’s market and there are multiple offers,” said Beth Fernandez, an agent at Premiere Property Group in Portland, Oregon.

Love letters are especially a minefield in today’s high-demand market,  agreed Jason Morris, a real estate agent at Delaware Home Gallery.   

“They simply exacerbate this already difficult situation, and are essentially just attempts at blatant emotional manipulation,” Morris said.

How does this manipulation play out? Real estate agents kept pointing to three ways: Expressing religious preferences, discussing kids, and showing cute animals.

Pacitto, who spent years as an agent in the San Fernando Valley, has repeatedly seen buyer’s curry favor by saying they would love the home because it is close to a certain synagogue, temple, or church.

Another trick in the buyer’s book, Pacitto said, is to discuss that they are married with children, and have done research on local schools.

Buyers also trot out animal pictures, though sometimes those don’t help.  

“I once got a love letter with a photo of a girl and her horse,” Fernandez said. “She must have been 22-years-old and paid cash for the house, which is why her offer won. We called her pony girl throughout the entire transaction. I always think of that letter as the epitome of privilege.”

While pony pictures might not prompt a fair housing complaint, talking religion or family could.  

“When emotion plus money mix it creates a strong litigation cocktail,” said RaySean Reaves, a Compass agent in Nashville, Tennessee.

The Oregon chapter of the National Association of Realtors agrees. Chapter CEO Jenny Pakula supported the bill, stating it, “Demonstrates our commitment to advancing fair housing legislation to ensure every Oregonian has access to the dream of homeownership.”

Added Pakula, “We believe the best way to ensure there is no bias in a transaction is to allow the offers to be judged on the numbers rather than personal narratives.”

In defense of personal narratives

Not all agents see ratcheting up the emotions as bad.  

“In many cases the sale of a home is similar to having to give away a much-loved dog,” said one Northern California agent who requested anonymity. “A seller will want the home to go to someone who will love it as much as they do.”

“The love letter saga is preposterous,” declared a different Northern California agent, Jim Minkey of Golden Gate Sotheby’s Realty. “I’ve had my clients write love letters for over 25 years, many times effectively. They merely express the desire to connect with the seller and obviously try to persuade the seller to pick them.”

Cindi Blackwood, an eXp broker in Little Rock, Arkansas, said agents fear Arkansas would adopt Oregon’s proposal.

“All the agents told me the same thing: This is overreach,” Blackwood said. “It is our job as real estate brokers and agents to educate both buyers and sellers and let them make the decisions.”

Overreach can mean a couple of things.

One is the philosophical argument government is meddling out of a paternalistic fear agents cannot themselves stop informal communications from morphing into discrimination.

The other is more practical. How would this meddling be enforced? And what meddling comes next?  

“Sellers could possibly look at certain surnames such as Hernandez, or Patel, or LaQuandra for first name, and hazard a guess of the buyers’ ethnic background and still hold a bias,” said April Jones, an agent at East Bay Realty.

Sellers can also do an Internet search of any buyer’s name.

Minkey of Golden Gate Sotheby’s Realty sees a slippery slope of government encroachment.

“If a love letter provides an unfair competitive advantage,” he said. “Then we should also outlaw cash offers.”

Supporters of the love letter ban are still working through these practical worries.

The powerful NAR, which often guides real estate policy and practices, has not taken the lead on this issue.

Pacitto, the Sotheby’s agent, envisions a future where perhaps the NAR does. Listings marketed on NAR-sanctioned Multiple Listings Services, Pacitto suggested, would contain a love letter warning.

Until then, Oregon will likely experiment with this new restriction. Gov. Brown’s office did not respond to repeated messages, but Meek said that the governor “Was supportive of the idea.”

“I realize to some this may seem nitpicky,” Meek said. “But we are trying to equalize opportunity.”