Home-buying love letters are on the way out

What’s meant to promote fairness could end up being discriminatory


I just learned that the letters buyers sometimes include with their offers hoping to charm sellers into accepting theirs over all others are called “love letters.” I also just learned that in Oregon, they’re about to become illegal.

Oregon bill 2550, which passed through the State House on June 8, requires that “a seller’s agent shall reject any communication other than the customary documents in a real estate transaction.” Why? We’ll get to that. But first: a short history of love letters.

They’re the spiritual descendants of the “renter’s resumes” we lugged around the last time I moved to San Francisco. This was in 2000, when the first tech wave made for a perilous local rental market. My renter’s resume included a heartwarming picture of my wife and me, plus our adorable 3-year-old, taken the previous fall at a pumpkin patch in Seattle.

We carried our renter’s resumes everywhere, to the rental agency place in the Castro, to every feeding frenzy of an open house, where cars circled the block like limousines at a Hollywood premiere. I don’t know if renters’ resumes are still a thing — I doubt it, given the performance of the market in 2020 — but last winter, when we sold our house, we received “love letters” from prospective buyers.

Love letters are charming, a little dab of humanity in the otherwise dreary and faceless home-selling process, and they work. It’s flattering to hear how much someone wants your house, and if I’ve lived here for 20 years, you’d better believe I’m going with the buyer who plans to also live here for 20 years and not the one whose vision is to knock out a few walls and flip the thing next summer.

And yet, I hear from local agents that love letters are on their way out: “Too much liability.”

Unfortunately, what is true for traditional love letters is also true for those of the real estate variety: They function better in a less cynical world. According to the National Association of Realtors, two agents I spoke to and the great state of Oregon, love letters can tilt the playing field in directions it shouldn’t be tilted, appealing to the worst elements of human nature and exposing agents to Fair Housing Act violations.

Oregon Bill 2550 explains that the ban on love letters is designed “to help a seller avoid selecting a buyer based on the buyer’s race, color, religion, sex, sexual orientation, national orientation, marital status or familiar status.” As the National Association of Realtors website echoes, “(Love letters) often contain personal information and reveal characteristics of the buyer, such as race, religion or familial status, which could then be used…as an unlawful basis for a seller’s decision to accept or reject an offer.”

The bill does assume the worst about human nature, but aside from that, its aim is true. What I wonder is if its authors have considered the unintended consequences of making illegal any soft communication between seller and potential buyers. Remove the human element from the transaction and sellers are left with one choice: to sell to the highest bidder.

This is great for all-cash (or high-downpayment) buyers, no contingency buyers, buyers in a position to confidently blow all other offers out of the water, but where does it leave first-time buyers, stretch buyers, buyers with 5 percent to put down? You get the picture. A law designed to make home ownership less discriminatory could end up accidentally doing the opposite.

Here in San Francisco, we have other reasons to say goodbye to love letters. Yes, they put agents and buyers at risk of violating the Fair Housing Act, but also, we have so many of those blow-you-out-of-the-water buyers that love letters have lost their efficacy, which, of course, is its own kind of crisis.

So the love letter fades into the past, another hazy relic, like Seals Stadium and the Co- Existence Bagel Shop, of old San Francisco.

“I did have a seller in the Mission,” an agent told me this week, “who learned that one (potential buyer) was already living in the neighborhood. He took that offer over a cash deal that was $25,000 higher.”

“It’s very rare, though.”

Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.