To all the agents in the house,
Why is it okay to not sell your house to the highest bidder? Is it okay to sell your home to someone for less because you like them more?
My colleague Brooklee Han recently dove into the debate of whether Oregon can legally ban "love letters," that is correspondence prospective homebuyers pen to sellers about why they might be the right fit to purchase a home. In June, Oregon Gov. Kate Brown signed a law effectively banning love letters.
In November, Portland brokerage Total Real Estate Group sued Oregon claiming that the ban, set to go into effect Jan. 1, violates First Amendment freedom of speech rights of real estate agents, brokers, and their clients.
The state of Oregon has yet to file a legal response to this lawsuit, and a hearing date has not been set for Total Real Estate Group's motion to enjoin the new legislation. Oregon is expected to reply that these letters could lead to Fair Housing Act or state law violations.
For example, Oregon law bars housing discrimination on marital status. So, a seller positively responding to a potential homebuyer writing, "My husband and I just got married and your house is perfect for us starting our new life together," is already a possible legal issue.
The love letter issue itself is important. What is the right ethical way for agents to handle these missives, and will other states adopt the Oregon law?
But it also leads to a much larger issue: The discretion that sellers, and their agents, have in selling their homes. The seller's option to not sell their home to the highest bidder has potentially led to other forms of bias, including being chilly to homebuyers who plan to purchase using a Veterans Affairs or Federal Housing Administration mortgage loan.
Status quo proponents might argue that it is sometimes not clear what is the highest bid. For example, a $400,000 cash offer could be better than a $415,000 offer paid over the course of a 30-year-mortgage.
But should there be more efforts to standardize what is the best offer? It would be grounds for a consumer lawsuit if someone was not served at a restaurant because of the presumed ethnicity of their last name, or what turns up after a five-minute Google search. But these practices are, I would argue, implicitly permitted in the current housing economy.
But agents let me know your thoughts, and if I may have this wrong. You can email at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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