A real estate firm is seeking to block a new Oregon law that bans real estate agents from forwarding “love letters” from homebuyers to sellers.
According to the lawsuit, filed Friday in federal court by conservative Pacific Legal Foundation for Total Real Estate Group, the ban placed on communications by the state violates the First Amendment rights real estate brokers and clients.
“This censorship is based on mere speculation that sellers might sometimes rely on information in these letters to discriminate based on a protected class,” according to the lawsuit.
Oregon Attorney General Ellen Rosenblum and Oregon Real Estate Commissioner Steve Strode could not be reached for comment.
Oregon has banned the practice for the first time. Under the new law, which is scheduled to take effect in January, real estate agents will not be allowed to pass along personal pitches from buyers that can include personal details about people’s lives along with photographs and videos. Buyers will still be allowed to communicate directly with home sellers.
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In hot markets where multiple bidders are jockeying for the same house, buyers will do just about anything to get their offer noticed – and that includes writing “love letters” in hopes of making a personal connection with a seller.
Increasingly, the real industry has grown uneasy that “love letters” could violate state and federal fair housing laws by revealing the buyer’s race, color, religion, sex, sexual orientation, national origin, marital status or familial status. They are being rejected by many real estate agents.
Democratic Rep. Mark Meek, the state lawmaker who sponsored the legislation, told USA TODAY in August that Oregon is not impeding free speech.
“We are limiting transmission of communications that are not relevant and could potentially be breaking fair housing laws,” he said.
No other state has followed Oregon’s lead.
Daniel Ortner, an attorney with the Pacific Legal Foundation, says the Oregon law is “a blatant First Amendment violation.”
“Love letters” can help first-time buyers compete with cash-rich buyers or institutional investors and can help sellers searching for buyers who will care for their homes and be good neighbors, Ortner said. The letters also signal genuine interest in a property, he said.
At the same time, Ortner says the law’s proponents have not produced any examples of fair housing complaints or lawsuits as a result of love letters.
“This is a solution in search of a problem. There is no evidence that it is a real problem that’s really resulting in discrimination,” he said. “And you can’t just go and ban whole types of communication in the fear that some small portion of it might somehow be used by someone.”
This industrywide reckoning is about the complicity of its housing discrimination and segregation in keeping Black Americans out of homeownership for decades, which has led to the backlash against love letter.
Newsday published in 2019 the results of an undercover investigation over three years that revealed discriminatory practices by agents when selling homes on Long Island. This helped to keep Long Island’s neighborhoods segregated. The investigation revealed that agents treated residents of Black communities and people of color in a discriminatory manner.
Following the Minneapolis shooting death of George Floyd, reform efforts were intensified to increase Black homeownership.
Last year, love letters were the focus of national attention after the National Association of Realtors advised members that they aren’t as harmless as they may seem.
Love letters have become more in demand as record-low housing inventories and stratospheric pricing fuel bidding wars throughout the country.
Realtors say they don’t want to put their buyers at a disadvantage in competitive situations by refusing to pass them along. They also claim that sellers will be influenced by terms and the offer price.
However, the right words may be convincing. Redfin conducted a study in 2019 to determine the most efficient strategies to win bidding wars. All-cash offers more than tripled a buyer’s odds. Writing a love letter came in second, increasing a buyer’s chances by 59%.