** LEGAL UPDATE **
If you are planning to buy a home in Oregon, don't count on taking part in what has become a common nationwide practice: to sway home sellers into choosing one offer from a bunch of others by submitting a so-called "love letter" with the offer. Under House Bill 2550, which Governor Kate Brown signed, seller's agents must, starting in 2022, reject any direct communications from a home buyer to a seller that fall outside the scope of a traditional offer.
NOTE: THIS MATTER IS IN LITIGATION, SO NOT FINAL. In March of 2022, a U.S. district judge issued a preliminary injunction, ordering a pause on the law. Although agreeing that the law's goal was laudable, the judge declared it went too far in restricting free speech. Keep reading for details on what will happen if the law is eventually upheld (once the litigation is over).
If you've read any of Nolo's books on home buying or selling, you will know that buyers facing hot markets and bidding wars often add personal letters to sellers with their offers, sometimes even with photos.
The letters might, for instance, tell the seller how the offerors have fallen in love with the home, how they plan to raise children there, how they're looking forward to the short bike ride to their job at a local charity or to their church, temple, or synagogue, and how they will carefully tend and enjoy the fruit trees. Such letters are a way of not only personalizing the offer and making the seller feel that a particular set of buyers "deserves" the home, but of assuring a home seller who is sad about parting with the house that it will be in good hands.
The reason lawmakers got involved, however, concerns potential discrimination. Inevitably, such letters reveal personal information about the offerors; enough that sellers could easily learn that they fall into a legally protected group when it comes to race, gender, religion, or family composition. The very information that might lead one seller to elevate an offer to the top of the pack might make another reject it, and both for possibly discriminatory reasons.
The National Association of Realtors became concerned with the matter, and the potential legal liability faced by home sellers, and issued guidance in 2020 discouraging such letters. But such guidance isn't law, and the practice continues to be legal in most states.
In Oregon, however, the new law (a section to be added to Oregon Revised Statutes or ORS § 696.805) puts clear responsibility on the seller's real estate agent. It says that the agent's legal duties include rejecting "any communication other than customary documents in a real estate transaction, including photographs, provided by a buyer," so as 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 (42 U.S.C. 3601 et seq.)."
Home buyers and sellers should not be surprised to see other states follow suit.
On the other hand, the new law also has to survive litigation. In November of 2021, the Pacific Legal Foundation reportedly filed suit in federal court on behalf of Total Real Estate Group, claiming that Oregon's ban on such letters violates the First Amendment rights of real estate brokers and their clients.
Effective date: January 1, 2022