Love letter ban ruled unconstitutional, but risks remain if buyers submit them.
“Buyer love letters” gained popularity a couple of decades ago as a tool for competing in a hot market. Buyers hope their letter, a personal and emotional appeal to the seller, will help their offer stand out. But in recent years, attorneys have urged caution in the use of such letters, saying the information in them could be used to discriminate. When one state took action to stop the use of love letters, a broker protested—and won.
The Case: In 2021, the Oregon legislature banned buyer love letters in the state, noting the practice could lead sellers to deny or choose an offer based on race, religion, gender or other protected classes, which would violate federal fair housing laws. It was the first such prohibition in the United States. Total Real Estate Group, an Oregon brokerage, sued the real estate commissioner, Steve Strode, and attorney general, Ellen Rosenblum, over the ban.
The Ruling: In March, a federal judge ruled in favor of the broker age, saying the Oregon ban violated the First Amendment. As a result, the state’s real estate commissioner agreed to stop enforcing the statute.
Although the court agreed with letters, saying the information in the defendants that love letters could perpetuate implicit bias and racial disparities in homeownership, it noted the letters contain a significant amount of “innocuous information,” such as compliments on a home’s style or a shared love of gardening. The court also said there are other ways to combat housing discrimination, such as greater enforcement of existing fair housing laws and requiring a fair housing disclosure in transactions—alternatives that don’t overly restrict “otherwise lawful speech.” Ruling on the First Amendment argument, the judge cited a previous circuit court case that said, “It is always in the public interest to prevent the violation of a party’s constitutional rights.”
Best Practices: NAR continues to recommend that you advise buyers and sellers about the potential risk of using love letters and avoid sharing information that could be used to discriminate. Sellers should evaluate offers using objective criteria, such as price, timing and contingencies. In addition, brokers should provide fair housing training to agents and employees. View NAR training programs here.
What’s Next: Although the Oregon ban has been struck down, legislators in other states have floated similar statutes. A Rhode Island bill is being held for further study, and some Washington state lawmakers are considering reintroducing a stalled bill on the issue.
©National Association of REALTORS
®Reprinted with permission
