Homebuyer ‘Love Letters’ May Stir Bias. (But They Often Work.)

This story was originally posted by Stateline, an initiative of the Pew Charitable Trusts.

Several years ago, Kristine Chadwick and her family were trying to buy a house in Eugene, Oregon. The market was competitive, so her agent suggested she write a letter to the seller, describing her husband, three kids, two dogs and one cat, and why she wanted to raise her family in the house. Hers was not the highest bid, but she got the house anyway.

The letter worked.

“It was really important to the seller who was going to be there, raising a family,” said Chadwick, an executive in an education consulting firm, in a phone interview. “She wanted a family who would love the house the way she loved the house. We wanted a place to happily finish raising our children [then two teenagers and an 8-year-old].”

Notes like Chadwick’s, often called real estate “love letters,” have become even more popular lately as the residential housing market sizzles around the country and more homes for sale attract multiple offers.

But such letters also could open the door to discrimination. If the seller reads a letter or sees a photo that reveals the race, sex, religion or ethnicity of the would-be buyer, and the seller rejects the bid out of prejudice, that might violate federal or state fair housing laws—especially if the suitor happens to be offering the highest bid.

With that in mind, Oregon recently became the first state to prohibit real estate agents from transmitting such letters from buyers to sellers, starting next year. In doing so, the state was heeding entreaties from real estate agents who worried that passing on such missives might ensnare them in a fair housing violation.

But such charges are devilishly difficult to prove, fair housing experts say, and few if any lawsuits have been filed using love letters as the criteria for a case. In addition, the new law may do more to protect the real estate agents than homebuyers. 

Real estate trade groups in states such as California and Washington also have recognized the issue Oregon’s love letter law seeks to address, but no similar bill has been introduced in any other state this year, according to the National Conference of State Legislatures and the National Association of Realtors. Many states do, however, discourage the practice.

The Colorado Division of Real Estate, for example, warns agents in the real estate courses they are required to take that they should steer their clients away from writing or considering love letters. However, the state does not prohibit them, according to Eric Turner, the division’s deputy director.

“Generally, it’s frowned upon,” Turner said in a phone interview. “If a seller is looking at multiple offers, it should really be about the terms they are offering. If in a letter they self-identify, it could be a protected class. That could potentially go sour for the seller who could intentionally or unintentionally use that information about a protected class.

“The focus should be on the purchase offer and what’s contained in that offer.”

The National Association of Realtors, an industry advocacy group, has advised agents of the risks of love letters, said Bryan Greene, vice president of policy advocacy, and has issued guidance against them. “There is risk from a fair housing perspective. It may be small from an enforcement perspective; I’ve not seen any litigation involved. Beyond risk, there’s just an ethics issue [of] whether use of these letters can perpetuate segregation.”

Oregon state Rep. Mark Meek, a Democrat and a real estate broker himself, said agents in the Oregon chapter of the Realtors group approached him about their concerns, leading to the bill. But he said he did not know of any related fair housing cases

“I’m a listing agent, I receive offers from my clients. All of a sudden, these pictures flash in my face, them and their kids, them and their dogs. And a letter explaining why we love the house, [we want to] have kids walk to school, church is right down the street,” he said in a phone interview. “We probably should not be allowing these pictures, because sellers can make decisions based on who is in them.”

He said the wording of the letters gets tricky, if they contain “red” words “that would skirt on the border of breaking fair housing laws.” One example, he said, would be a reference to the desirability of having a church nearby. Prior to the Oregon law, he said, agents had a professional responsibility to pass along any communication from the prospective buyer to the seller.

“When it came to these letters, we had to pass them along also, we had no latitude,” he said.

He said that he has had situations where there are three offers, all over the asking price, and a seller chooses a lower price offer. “I asked why, and they said they really want to see those kids walk to school. In hindsight, those implicit biases really do weigh in.”

Cutting down on the interpersonal communication between buyer and seller could help ameliorate the disparity in homeownership between people of color and White residents, he said. According to the American Community Survey in 2019, 72% of White residents were homeowners, compared with 42% of Black residents, 61% of Asian residents and 48% of Hispanic residents.

The unspoken, but badly kept secret is that the letters work.

Oregon real estate broker Bobby Stevens, who helped Chadwick and her family with their house-buying love letter, said he used the letters to “try to give my clients an extra edge.” He said a shortage of properties has sent most buyers into bidding wars lately with multiple offers on every property—many far above the asking price. The letters, he said, “put a face on the buyer and maybe help influence the sellers.”

But the new Oregon law will take him away from that practice. Stevens said he fully understands the potential for discrimination and will simply say that his buyers love the house and meet the financial qualifications “not in a personal way.”

In the Oregon legislature, what little opposition there was came from Republicans who disapproved of government interfering in the housing market.

State Sen. Lynn Findley, a Republican, one of 11 senators who voted no, said in an email that “discrimination of any kind is never acceptable and should not be tolerated under any circumstances.”

However, he said he voted against the bill because in “an open dialogue between buyers and sellers, communication is important in such a significant decision for either party. I don’t see this as a matter where the state legislature needs to get involved.”  

Richard Stanley, a Los Angeles real estate agent, said he has not seen a seller “blatantly” discriminate against a potential buyer who wrote a letter, but he has seen the letters backfire.

Stanley said he had a seller who was “very astute on the internet” and researched the six or seven offers he got from would-be buyers, some of whom wrote love letters. One that did was a local family whose letter said they were looking forward to having their kids play in the yard.

“He researched everybody, including one family who lived around the corner, who were renters, and had a good number of kids, a large brood. He went by the house and was appalled at the way they kept the [outside] of the house,” Stanley said. “The idea that he would turn it over to a family of five or six kids and have them ride that house hard appalled him. Fortunately, their offer was below the most remunerative offer he did receive.”

An internet search for real estate love letters turned up dozens of sample letters buyers can mimic to express their affection for a home and tout their family’s attributes. A recently sold home in a desirable Northern Virginia neighborhood inspired this actual letter from the buyers:

“We toured your beautiful house yesterday and fell in love with what we saw. The home is a perfect fit, and we cannot wait to enjoy the beautiful screened porch and cook out. We host many family gatherings and love entertaining friends, and your house offers so many great qualities.”

The letter went on to describe how the would-be buyers’ daughter had just been accepted into an accelerated program with the county school system. Their offer was also the highest. They got the house.

Charlotte, North Carolina, agent Leigh Thomas Brown said sometimes buyers will try to use the letters as “an emotional cudgel,” and she has to remind sellers that this is a financial transaction, not a seduction. She discourages the letters, “but sometimes buyers will drop off the letters at the house, outside. As Realtors we have to walk this line on ethical considerations,” she said in a phone interview.

Stanley, the California real estate agent, said prohibiting the letters will help take personalities out of a process that really should be a numbers game.

“Anything that makes the playing field closer to being level and simplifies the process is better for everyone,” he said. “It’s a business transaction, it shouldn’t be a beauty contest.”