Oregon 1st to ban homebuyer love letters

The practice of prospective homebuyers writing a letter to the owners of the house they’d like to buy is a longstanding one. And in a hot real estate market it can be the deciding factor when a seller has multiple offers. But Oregon State Rep. Mark Meek (D, Clackamas County), who is also a real estate agent, began to reconsider the practice as he became more involved in work to combat housing discrimination. The details in those letters often contain information including race, religion, sexual orientation and other personal information that could contribute to a buyer facing discrimination. The law prohibits a seller’s agent from accepting such letters. Mark Meek joins us to share more about his 25 years as a real estate agent and why he championed the bill.

This transcript was created by a computer and edited by a volunteer.

Dave Miller: Starting in January, people selling their homes in Oregon won’t be able to read letters by prospective buyers. Oregon became the first state in the country to ban these so-called love letters. The idea behind the ban is to prevent sellers from choosing a buyer based on things like race or sexual orientation or national origin. Mark Meek was the chief sponsor of the bill. He’s a Democratic state representative from Clackamas County and a real estate broker himself. Mark Meek, welcome Think Out Loud.

How did this bill come to be?

Mark Meek: In 2018 (I’ve been in the legislature since 2017) and [during] the short session in 2018, I sponsored a bill to establish a task force to specifically address racial disparities here in Oregon and that was passed in 2018. We started to work in late 2018 and worked all the way until about December of 2019 and brought the bill forward to help address racial disparities. But this concept, this idea, came out of some anecdotal work during that task force when we were trying to discover what are some practices that may be extenuating and perpetuating implicit biases among sellers. And this came to mind as one of the practices that I’ve both witnessed and experienced throughout my career.

Miller: I want to hear about your experience because it seems like it really informed this, But let’s first have a listen to a voicemail. We asked our listeners over the last couple days about their experiences on the selling end or the buying end with these letters. This is Nancy who called in from Hillsborough.

Nancy: I was dumbfounded when I was absolutely asked by our agent, our buyer’s agent, to submit one of these love letters. Being the recovering attorney that I am, I couldn’t understand why someone [would] want to know this information or would ask me to write a letter. I didn’t understand [that] if I have approval from a mortgage company and money and I’m ready to buy, what is this letter about? So I fought and fought and fought. My husband begged me to capitulate and I did so. I wrote a very cheeky letter and it wasn’t even a letter. What I did was I put together a front page of a newspaper and kind of made it up and used a picture of my family at Santiam Pass with the statue of Bigfoot. I did not include any information about where I worked or who I worked for or anything else, but at least I did it.

As it turned out, we got the house. However, it had nothing to do with the love letter. It was about the fact that my family was a little bit more flexible when we needed to move in and the sellers needed someone with flexibility. I was appalled by the process. I’ve threatened everybody to sue them for discrimination if we didn’t get the house for any reason. And I am glad that the state is banning these “love letters” for people like ourselves. We are African-American, coming to a state like this, or for anybody coming to any state that wants to buy a piece of property.

The idea of these letters is absolutely just horrendous. So thank you to the state of Oregon for recognizing that this should be banned.

Miller: Mark Meek, there’s a lot in there, but I want to start with the beginning where her real estate agent, as she was trying to buy a house, urged her to write a letter. How common is that in the recent real estate market?

Meek: Well, it has become more and more common over the last several years as the market has heated up. And part of her response is very on point of what we were trying to deal with. Right now, a lot of real estate brokerages discourage the practice of encouraging a letter [or] even accepting them. So it’s the practices out there. But I’m very thankful for her statement and her message today because it is very relevant and really right on point because when you think about even what I was initially thinking about was the photo. [As] a listing agent working for sellers, I’ve been on the receiving end of these letters and offers. We’ve had to go through like a spreadsheet of who the best offer is, normally based on the down payment, flexibility, closing date, inspections, contingencies, things like that. But we received these love letters and we have to forward them on. And in many cases, they include a picture of the family. And during that task force, I was thinking about maybe it’s the picture we don’t allow. But in the letter, it does refer to their background, familial status, religion, marital status and a lot of those things that should not be shared or even considered as part of the decision-making process.

Miller: In fact, in the bill that became law, it specifically says, “In order to help a seller avoid selecting a buyer based on the buyer’s race, color, religion, sex, sexual orientation, national origin, marital status or familial status as prohibited by the Fair Housing Act by federal law, now, a seller’s agent shall reject any communication other than customary documents in a real estate transaction, including photographs provided by a buyer.” So you put in photographs there because that was one more bit of information that you didn’t want to be considered.

Meek: Exactly. Because [as] part of our work on that task force we went through some exercises dealing with terminologies and one of them was “implicit biases.” What does that mean? And how does that work? Many folks, many people, will gravitate or like or lean towards folks similar to themselves or similar to their neighbors. The photo was very, very important. And I’m thankful that I got support from the legislature to get this passed.

Miller: As I mentioned, under this law, prospective buyers can write letters and they can give them to their real estate agents who would then give them to the seller’s agent. But the sellers’ agents can’t pass them on to the homeowners, to their clients. Would anything prevent a prospective buyer from sending a letter directly to a seller?

Meek: Nothing, nothing at all. The purpose of my action and this concept and bill was that, as an agent, [as] part of our fiduciary duties, we have to pass along all written communications to the seller or back and forth to the buyer. And this law was put into place to keep that from having to go through and to keep the seller’s agent from having to forward information that may help or may perpetuate some of these biases. But the reason we didn’t say it’s illegal to write a letter or send the letters [is] that we can’t limit free speech. So a buyer is able to do anything if they want to try to communicate with the seller.

In most cases, the reason you have an agent is to keep that arms-length relationship intact because in many cases the seller may not like the buyer at all and then we don’t want anything to muddy the transaction. So we try to keep those personalities separated and that’s the value of having an agent and agency in the first place.

Miller: I want to run another voicemail by you. This is Kyle in Eugene.

Kyle: I wrote several letters that were exchanged between my realtor and the homeowner that I believe were very important to my ability to negotiate and purchase the home. (I should mention that I do identify as a white male, but I guess some people might consider me multiracial because my father is half black.) But I really think this love letter ban is entirely wrong and entirely detrimental to the people who are desperate to find homes and purchase homes and want to have the ability to communicate with the owner. And while I understand the intention to prevent discrimination, I think that there are probably better methods to do that such as allowing people who feel they’ve been discriminated against to submit complaints and for those complaints to be followed up through a civil legal process. I just really think that we should be able to communicate in any transaction however we like and I think that it’s going to hurt people of color, black and brown people. I’d like to see some statistics I guess. I just really don’t think that this is the right law.

Miller: So Mark Meek. For that last point, he said, “I want to see some statistics.” Do you have data to back up the harm that you’re alleging?

Meek: I’m glad you brought that up. I’ll answer that in two segments. One of the segments is that the statistics I have is that when I was working on this task force for the disparities and homeownership, while our caucasian white Oregonians appreciate and are able to achieve homeownership at a rate of about 65% of the population, our Black and African American Oregonians are appreciating and realizing homeownership at a rate of 32%. So that’s a big statistic to take in mind right now. Is it because of this letter? Is it because of that practice? No. And not always, not in all cases, But is that practice perpetuating it?

On the other end, about the breaking of fair housing laws? There is no enforcement mechanism per se, especially when it comes to this letter. In my business or even in this industry, if we try to say, “just a few blocks from the local church” or the catholic church, Protestant, synagogue, whatever it is, we cannot advertise that because we would be breaking fair housing laws.

Miller: In the listing, you cannot say, “This house is two blocks from this particular church.”

Meek: Exactly. We cannot state anything about religion. We can’t say, “This is perfect for a single-family.” We can’t say, “This is good for single people.” We can’t say, “family.” There’s a lot of those things that we cannot say. We can’t even say, “Close to the school.”

So, on the reverse end, this letter can state to the seller, this is self-identifying, who I am to you and hopefully, I am attractive to you as being the person you’re going to select to sell this home to.

Unfortunately, while our last guest speaker, our guest caller, said that they feel that there’s going to be harm to our Black, brown and BIPOC communities, those are the exceptions and not the rule because, unfortunately, through psychology and all of their practices, these implicit biases are real. People gravitate to like-minded people. And, as you can see from the statistics, only 32% of our Black and African American populations own homes in Oregon. How many of those are receiving offers and looking at other people to make their decision.

Miller: Let me play you another voicemail. This one came from Lauren in Portland who says that she has recent experience on both sides of real estate transactions.

Lauren: This definitely affected me and my husband. We recently sold our house in Portland and bought a new one in Oregon City and luckily we snuck in before this law was enacted. We were able to both write a letter which was great because we were going up against some other offers that had better terms. But the owner went with [us] because of our letter. It really spoke to him and he even wrote a big smiley face on the letter itself. And then when we sold our home, I was able to pick based on a letter that we received that was super touching. They really loved all the remodels we had done and the little details that really spoke to them. I knew that when I bought this house, that they were really going to love it as much as us. And I just think it’s unfortunate that this new law is being enacted because I think it really hurts the little guy that doesn’t have that all-cash offer or 20% down. We definitely didn’t and we were able to still get a home because of the letter. So I really think it only benefits developers and people that can come in with a lot of cash. I’m just so thankful that I know that my home went to someone that’s going to appreciate it and not just tear it down and build a quadplex or rent it out. I know they’re going to actually love it because of their letter

Miller: Mark, do you think there are situations where these letters are actually helping the very people you’re afraid could be harmed?

Meek: Like I was mentioning before, potentially a seller may gravitate and/or accept an offer from somebody that, like I said, that they identify with one way or another, but it is still a discriminatory practice and is that the type of industry we want to continue working with?

I want, my hope has been, and I’ve seen it over my 25-year history, is that our supply has become less and less available and less and less affordable. And why is that? For many years we’ve been one of the most highly sought and immigrated states in the nation and that actually puts a lot of pressure on our housing. We have amazing housing. Our development codes and laws have kept us from being able to keep up with demand. Is this letter going to keep a family from getting a home? No. That’s not the main issue.

The main issue is supply, affordability, the cost, and basically, the wonderful community and state we live in. It’s still my goal and hope [to pass], House Bill 2001 which allows more density on individual lots and more recently, I think it’s [HB] 2003 or [HB] 4003, which would allow these lots to be divided, bought, and sold for homeownership instead of just rentals. Those are the keys we need to look at. It is making housing more available at workforce housing rates [for] average citizens, blue-collar, hard-working people and not just [focus on] affordable housing where you have to qualify [by being] under the poverty level.

We need to provide housing at many levels. And whether it’s discrimination, whether you’re gravitating to your own ethnicity, background, it’s still discriminatory. I think that until we change these practices we are not going to allow housing to be available to everybody for any reason.

Miller: We just have about a minute left. But one more question that came up from that voicemail and others. Will homeowners going forward be able to distinguish between prospective buyers who are looking for a home to live in or looking to flip or buying a home as an investment?

Meek: Absolutely. That is something that can be ascertained and asked for in many cases. You will see that I’m a home builder, home flipper, LLC. Most of these people that are doing the investments are at least listed as a trusted LLC, some type of entity. You can tell they’re bringing in cash. They’re doing a 1031 exchange. And so being able to determine whether you’re going to be a homeowner/occupant or for an investment is fully able to be disclosed.

Miller: Mark Meek, thanks very much for joining us today. I appreciate your time. Mark Meek is a Democratic state representative from Clackamas County, representing District 40. He is also a real estate broker himself. He is also a real estate broker himself.

Contact “Think Out Loud®”

If you’d like to comment on any of the topics in this show or suggest a topic of your own, please get in touch with us on Facebook or Twitter, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983. The call-in phone number during the noon hour is 888-665-5865.