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gowhatyourself t1_j68gx6g wrote

If anyone wants a kind of "on the ground" perspective on housing I did a pretty thorough post about it a little while ago.

https://old.reddit.com/r/rva/comments/101bxgh/rva_real_estate_outlook_2023_behold_a_pale_gray/

Something I don't usually go into because there really is no easy way to talk about it is the racial disparity issue mentioned in the OP. There are a number of reasons why this is a problem outside of my bubble in real estate, but there are also some reasons for why this is a problem within the industry. I have personally dealt with agents who expressed some pretty racist shit thinking that they were safe to talk that way since I'm a white realtor. Lots of agents saying things like "you know how THOSE people are". I've seen black clients of mine straight up ignored when we go to an open house or new home model. I've heard landlords say they don't want to rent to minorities when discussing rentals. The point is it's not some isolated occurrence. It happens way more often than people realize and even if people aren't openly saying it it's going to actively influence how they are treated throughout the process and whether or not offers are accepted or deals are struck.

This is why when a buyer "love letter" is brought up on reddit I lose my shit and tell people to stop fucking doing it because it opens the door to discrimination that is absofuckinglutely happening behind closed doors. That's the point of the letter and included photo. You are asking someone to engage in discrimination in your favor.

"Okay why does that matter?"

If you are a minority you may run into the problem of fighting an uphill battle for a few reasons. You may not have an offer accepted as easily if your name sounds a certain way. In a competitive environment that might mean you need to offer more up front in order to compensate which means the threshold for affordability might be higher than if you were white. It handicaps your purchasing power.

You may end up with an agent that took you on as a client but won't dedicate the kind of attention and time it might take for you to get what you want because that agent is just going through the motions and churning through volume. Same goes for some lenders. Maybe you get a higher rate or that lender drags their feet and won't respond as quickly as they would for another buyer. You may not be taken as seriously as a white buyer.

If you've listed your home offers might come in lower because people will assign a lower value to your home if they know you are a minority. This includes the process of getting an appraisal. This is an actual thing.

https://www.cnn.com/2021/12/09/business/black-homeowners-appraisal-discrimination-lawsuit/index.html

If your home is appraised lower or you don't get what most would consider fair market value you may not have the equity you need from the sale to get into your next home. Maybe your offers won't be as competitive.

Agents don't get a pass for this either. Minority agents earn significantly less than white agents for a lot of the same reasons. There are absolutely conversations that happen behind closed doors about certain brokerages and agents that coincidentally happen to be minority owned. Those agents are also dealing with some of the problems I mentioned. A big part of that is a perceived lack of credibility or knowledge because of what they look like, or assumptions about how they will conduct themselves in a transaction.

Like most things having to do with race there is very rarely that one thing that someone can point to and say "That's racist!". It's death by a thousand cuts. A slip of the tongue here a lack of attention there. It adds up. It's real.

I've read comments from other agents on here stating that they haven't personally seen or dealt with that kind of thing before. Maybe that's true or maybe they aren't as attuned to it as I am. My wife is a minority and our kids are mixed so maybe my radar is up more than most because of that.

I don't want this giant block of text to serve as discouragement for anyone looking at buying or selling. God knows you've probably already dealt with this kind of shit in other aspects of your life. I just want other people to be aware that this is a problem that doesn't get the attention it deserves in this industry and that some of us know it actually happens.

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notrealbutreally175 t1_j68nwz2 wrote

This is so true. My mom’s white, Dads Hispanic. When they searched for rentals, places would tell my dad they have no availability. But when my mom would call the same place, they suddenly had openings

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opienandm OP t1_j68iqeh wrote

Thank you for providing some grounding for the still significant systemic drivers of housing disparity. In short, it is far more difficult for black and/or Hispanic people to obtain affordable housing of any type than the “average” person. AFAIK, nobody is addressing this directly.

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gowhatyourself t1_j69c59t wrote

There are some groups that try to bring it up from time to time. I know there have been some productive discussions on how the industry handles some of these things despite the history real estate has with things like redlining and blockbusting. Skirting fair housing laws is absolutely still a thing and many brokers are starting to come down hard on it especially with regard to the buyer love letter thing.

It's really a difficult thing to address because even if you sort the industry side of it out you still have buyers and sellers who are more than willing to casually engage in racist behavior. Sort of like the big galaxy brained response to my post saying I'm a bad agent because I'm not okay discrimination or something.

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plummbob t1_j6ajo1w wrote

A frustrating but utterly predictable result of constrained supply. People will absolutely use non-price ways of sorting buyers/renters if they face limited competition and/or growing demand.

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We basically need to 'compete the racism out' of these people.

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gowhatyourself t1_j6alqkx wrote

> People will absolutely use non-price ways of sorting buyers/renters if they face limited competition and/or growing demand.

Limited consequences for their actions too unfortunately.

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spidermansaysherp t1_j68i80h wrote

You're not doing your responsibility as a real estate agent if you don't encourage your clients to write a "love letter" and include a photo if it will help that specific client. An individual client doesn't need to care about the larger discriminatory system when they are trying to buy a house for their own family. People don't want an agent that cares about all possible homebuyers, they want an agent that cares about themselves as a homebuyer. This is the foundation of the principal-agent problem and everyone should take all steps they can to give themselves the best chance they can to get the house they want in this market.

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goosey65 t1_j68jgrf wrote

While one individual choice can’t change a systematic issue on its own, we, as individuals, can have and should have personal ethics that impact our larger decisions.

In recent years, many in the real estate industry have pushed against writing to the home owners. Also, this person didn’t say they didn’t tell their clients not to, he said he pushes back when people talk about it on Reddit.

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spidermansaysherp t1_j69cybe wrote

I agree with everything you said. The economic reality of the housing market does make it harder for individuals to care about others though because it unfortunately is a zero-sum game currently.

Also, sure, this poster has only warned people on reddit, but that leaves two scenarios:

  1. They tell people on reddit not to it and they also tell their clients not to do it. In my opinion, I don't think that is working in a client's best interest based on what's currently legal. I can't speak to professional or ethics norms because I don't work in that industry.

  2. They tell people on reddit not to do it and then tell their clients to do it. Maybe a good strategy, but people on reddit would probably not be happy to hear this.

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gowhatyourself t1_j69s4hf wrote

> Also, sure, this poster has only warns people on reddit, but that leaves two scenarios: > > They tell people on reddit not to it and they also tell their clients not to do it. In my opinion, I don't think that is working in a client's best interest based on what's currently legal. I can't speak to professional or ethics norms because I don't work in that industry.

As I've already said that as an agent I'm not supposed to have anything to do with buyer love letters. I tell buyers they are a dumb idea that could backfire badly on them because they could just as easily be discriminated against. My broker does not approve of it. The NAR and RAR absolutely do not approve of it and have sent out numerous bulletins and emails saying they do not approve of it and do not want people to engage in the practice. I'm pretty sure HUD has even come out and said they can put you in legal jeopardy over fair housing laws. Agents who are using them regardless of all of these warnings are not agents I would advise working with for the same reason I wouldn't suggest working with agents who skirt other best practices, procedures, or laws.

I also tell my sellers that we should not accept letters under any circumstances and that I will be telling agents submitting letters that they will not be looked at or reviewed by the seller. I have picked up the phone and lit people up who sent me letters after stating up front that I do not want to see them.

Most agents agree with this position! Many will specifically state in listing agent-only comments that buyer letters will not be reviewed or passed on to the seller and that they do not want to receive them. Including them could negatively effect the perception of your offer. I'm not an outlier here. Suggesting that I am not working in the best interests of my clients is nuts considering that engaging in this kind of behavior can actively work against the interests of a client, put you in jeopardy with your brokerage/RAR/HUD, and even leave your buyer open to being discriminated against.

Or I'm making all of this up in an effort to misdirect the entire RVA reddit real estate market to give my buyers the unfair advantage. Totally plausible of course. Sure. Why not.

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spidermansaysherp t1_j6a10ua wrote

Whatever dude, doesn't affect my livelihood in any way. Writing letters worked for me and lots of people I know. I don't agree with you and that's fine.

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gowhatyourself t1_j6afuym wrote

> Whatever dude, doesn't affect my livelihood in any way. Writing letters ::insert discriminating behavior that benefits you here:: worked for me and lots of people I know . I don't agree with you and that's fine.

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[deleted] t1_j693grl wrote

[deleted]

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spidermansaysherp t1_j6991pa wrote

Then change the policy or law, a real estate agent is supposed to represent their client, not all possible clients.

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gowhatyourself t1_j69cnza wrote

It is the policy of most brokerages that you do not get involved with buyer love letters. Many states have banned the practice. The NAR has repeatedly told people to stop doing it. What you are suggesting I do is ignore all of this even though there is just as much of a chance it could backfire. It is a monumentally stupid take.

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khuldrim t1_j68kdo5 wrote

The letter writing thing is a whole can of unprofessional worms and if I were selling an deceived one straight into the trash it would go because if I opened it and there was a picture of a minority family and I didn’t pick their bid I’m opening myself up to legal action.

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Suchaweirdlife t1_j68yunh wrote

We recently sold a house in Northside and one of the offers included a love letter. I was totally disgusted by the tactic and it completely turned me off. The love letter writer did not get the house

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bastard__stepchild t1_j69b8ne wrote

Good on you. I think I would feel the same way. Reminds me of some “good ol boy system” type shit

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spidermansaysherp t1_j69djhx wrote

Thank you for sharing your anecdote. Based on my anecdotal experience, we did write a letter and did get our house during the pandemic.

Not many ways to differentiate offers when people are submitting bids waiving inspections and 50k above asking.

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plummbob t1_j6cuglq wrote

> everyone should take all steps they can to give themselves the best chance they can to get the house they want in this market.

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why artificial shortages lead to discrimination and inefficient allocation 101.

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if its anything other than "that is the best price," then the we need more housing competition.

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spidermansaysherp t1_j6d20rt wrote

Yeah sure, sales have no emotional component at all. Humans are just logic machines. /s

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plummbob t1_j6dn4xd wrote

People express that component in the prices they offer. Shit like racism and other forms of discrimination can basically be priced out of the market with enough competition..... as firms don't have the market power to hold out or use non-price forms of discrimination.

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