A court ruling that legalizes same-sex marriages in California may not cure the state’s housing slump — but it could drive more real estate transactions.
Wellsford Realty, a full-service real estate company in San Diego, Calif., announced a "Pride Promotion" that offers commission rebates to assist newly married same-sex couples to offset wedding-related expenses.
In offering the promotion, the brokerage has teamed with a company that provides wedding-planning services. In order to qualify for the rebate, same-sex couples must purchase a single-family home or condo using the services of a Wellsford Realty agent, and the couple can receive up to 33 percent of their agent’s commission amount in the form of a cash rebate.
April Sands, a spokeswoman for Wellsford Realty, said last week that the promotion hasn’t received much response yet, but noted that the marriage ruling is very new.
A panel of California Supreme Court judges, in a 4-3 ruling last month, found that language in state law that limits marriages to a union between a man and a woman "is unconstitutional and must be stricken," and the first same-sex marriage in the state following this ruling was held June 16.
"We’re hoping that this does stimulate the San Diego market," Sands said of the company’s promotion. "It’s something that kind of adds to the overall momentum of what’s going on with same-sex marriages."
A November ballot initiative in the state seeks to overturn the court’s ruling by declaring a ban on same-sex marriages. If voters pass the measure, it will be up to the courts to decide whether the state would honor the same-sex marriages that began last month, though this measure is expected to fail.
An estimated 100,000 same-sex couples live in California, according to GayRealEstate.com, a site that offers a directory of real estate professionals who serve the gay, lesbian, bisexual and transgender community of buyers and sellers.
An online announcement at that site charged that some couples "have been subjected to both overt and covert discrimination when it comes to the practice of real estate and the business of mortgage lending. Some have been told they cannot rent together. Others have been told that they cannot both put their names on a homeowner’s insurance policy." The site’s founder could not be reached for comment.
The announcement notes that Massachusetts in 2004 became the first state to legalize same-sex marriages.
Michael Pallares, a real estate agent at Metro Realty Corp. in Boston, said that the passage of a civil union law in Massachusetts did lead to more interest and inquiries from prospective buyers living outside the area.
"I can’t say there was a huge increase," he said, "because the market was pretty hot in general" when the law passed and it was difficult to gauge whether there was a surge in same-sex couples moving to the area to take advantage of the marriage law.
Sticker shock overwhelmed the desire to live in a gay-friendly area in some cases, said Pallares, who markets himself as a gay-friendly Realtor.
"If they were coming from San Francisco they were presently surprised (at the prices)," he said, but if they were coming from "Tuskalooska" they were definitely taken aback.
"You’re not going to move to a state, whether there is legal (same-sex) marriage or not, unless it makes sense economically," he said. "It’s dollars and cents, when it comes right down to it. It’s a huge purchase for a lot of first-time homeowners."
The marriage law in Massachusetts didn’t have any noticeable impact on mortgages and title insurance, he said, as lenders previously looked at credit jointly for unmarried couples buying a home together. "The marriage certificate doesn’t matter to the underwriter."
Gay and Lesbian Advocates and Defenders (GLAD), a New England legal rights organization, has posted information to its Web site about key points for couples considering same-sex marriage.
Marriage means that couples who own property together "will not have the ability to transfer property at divorce free of tax consequences, thus making it more difficult (and potentially depleting the couple’s assets) to achieve a fair balance of assets, for example, and in some states the conduct of parties during the marriage "can affect the division of property disadvantageously to the party who acted against the marriage."
GLAD also notes that some legal rules related to the transfer of property at divorce "are not available to same-sex couples because of federal DOMA (Defense of Marriage Act)," passed in 1996, which defines marriage as "a legal union between one man and one woman for purposes of all federal laws" and provide that states need not recognize same-sex marriages that are legal in other states.
Same-sex marriages will probably lead to more home sales in California, said Patrick Lowell, a Realtor with Zephyr Real Estate in San Francisco — and same-sex divorces will also bring more transactions to real estate agents.
Lowell said that same-sex marriages are so new to California that he hasn’t specifically marketed to newly married same-sex couples, adding, "that is a good target community" for real estate professionals.
Many agents, he said, will probably wait for the outcome of the November ballot initiative before investing heavily in marketing to same-sex newlyweds.
"A lot of agents are waiting for this to play out," he said.
Same-sex marriages will likely trigger more home purchases as individuals decide to sell separately owned homes and move "into one dream home," he said.
"I think it’s going to trigger some market activity. Up until now, people have been hesitant to combine assets. I have a feeling we’re going to see more purchases and sales because of it."
He added, "The other piece: What about gay divorce? I have handled many transactions because of divorce — not that divorce is a good thing, but there always ends up being a house that needs to be sold."
Lowell received a notice from a title company related to the same-sex ruling that assures the title process is basically unchanged for same-sex married couples. "They’re just noting that you don’t need to prove that you had a gay wedding," he said. "They don’t ask for any kind of proof of marriage."
A San Francisco-area sales manager for North American Title Co. sent an e-mail message to real estate professionals last week stating, "Generally speaking, underwriting guidelines for these transactions (by same-sex married couples) will be the same as transactions for heterosexual couples."
And, "The manner in which title is taken in a deed will be the same as our current practices for married persons."
Lowell said that there are a range of new Web sites springing up for same-sex weddings, and that will bring new marketing opportunities for real estate professionals. "There is a ton of opportunity," he said.
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