This article was last updated February 22, 2022.
There are times when our desire to serve our clients causes us to act automatically, without thinking through the implications of our actions. Other times, we act out of habit without realizing that best practices have changed, sometimes dramatically.
I recently overheard an agent touting the level of service he provided to his clients. While many of the points he emphasized were great, one comment drew me up short. “I provide detailed neighborhood reports to all my clients,” he stated. “Many of my clients want to know the crime rates in specific areas. So, I provide them with detailed crime statistics, neighborhood by neighborhood.”
With alarm bells sounding, I made it a point to pull him aside. “I applaud your dedication to your clients,” I said. “But the practice of providing crime reports to your clients is called steering and is a violation of the federal fair housing laws.”
His blank look evidenced the fact that while many agents give credence to the concept of fair housing, there is a general lack of understanding of the law’s finer points.
It’s no secret that our nation is in the throes of a crisis centered around racial equality, and the growing gap between the haves and have nots. There is no question that, as a nation, we must find meaningful solutions that will — once and for all — obliterate the barriers that divide and provide equal rights and opportunities for all.
It’s imperative, therefore, that we, as Realtors, not only uphold the letter of our nation’s fair housing laws, but the intent as well. We should not do anything that provides even a hint of steering, regardless of our personal opinions or feelings.
My personal commitment to these ideals landed me in hot water with the mother of a young female buyer who wanted to purchase a home in a crime-ridden area. I personally would not have wanted my own daughter living there and, as it turned out, the buyer’s mother, as she thoroughly ripped me for facilitating the purchase, communicated very clearly that she did not want her daughter living there either.
I explained to the mother that my role was to facilitate her daughter’s wishes and that I could not steer her out of that neighborhood. I closed the conversation by clarifying that any discussion as to the suitability of the area would have to be between mother and daughter. In the end, the daughter completed the purchase.
Flowing from the landmark Civil Rights Bill of 1964, The Fair Housing Act of 1968 prohibited discrimination concerning the sale, rental and financing of housing based on race, religion, national origin or sex.
As the National Association of Realtors (NAR) states, steering is “the practice of influencing a buyer’s choice of communities based upon one of the protected characteristics under the Fair Housing Act.” Put in simple terms, it’s any attempt to redirect anyone seeking potential housing in any area for any reason covered by the Fair Housing Act.
Although the Realtor’s Code of Ethics has the concept of fair housing built into it, and while equality in housing is also upheld by the NAR, there are many agents who either do not understand the fundamental principles or choose to ignore it for various reasons. NAR provides the following four best practices to help agents “steer clear of steering:”
1. ‘Provide clients with listings based on their objective criteria alone’
Historically, many agents have provided potential buyers with lists of homes they believe would be suitable choices for their clients. Some have been known to deliberately and prejudicially exclude properties in specific neighborhoods.
Since the inception of the fair housing laws in 1968, agents have been banned from using any personal bias in providing information about and access to homes on the market. The advent of public real estate portals such as realtor.com, Trulia and Zillow have also helped by providing potential buyers access to every listing on the market.
This has radically shifted buyer behaviors as they are now more likely to hand their agent a list of homes they want to see rather than relying on an agent to produce a list. Given such a list, an agent must honor their client’s desires and provide equal access to all.
2. ‘When a client uses vague terms such as nice, good or safe, ask impartial questions to clarify their criteria, such as property features and price point.’
Over the years, I’ve frequently been asked to provide qualitative information not only about a specific property but the overall neighborhood or community.
I’ve learned to be very specific in my comments by stating, “I can provide you with detailed information about the attributes of the home you are examining, but I’m forbidden by fair housing laws to provide specifics about the neighborhood or community.” When explained in this manner, I have never had a client push further.
3. ‘Only communicate objective information about neighborhoods and direct clients to third-party sources with neighborhood-specific information.’
It’s common for buyers to ask for information about specific neighborhoods, including crime rates, ethnic makeup, quality of the schools and more. Even though an agent may believe they have answers to the questions, their information will always be subjective.
Consequently, agents must keep their opinions to themselves and limit discussion to the specific attributes of any actual property in question. Agents can, however, provide clients with a list of third-party websites where buyers can go to research the information for themselves.
4. ‘Learn to pay attention to your unconscious biases. When evaluating what a client objectively wants, ask yourself why you have eliminated certain areas, if you have.’
The best rule of thumb is to never rule out properties based on the area but rather on the actual attributes of the home in question. As an example, you can state, “I’ve excluded this home from our search because it has a serious foundation issue with a repair estimate of $30,000. Since you have asked for move-in ready homes with no significant issues, I do not believe this home will be a good match.”
As Realtors, we have a fiduciary responsibility to represent our clients in the fulfillment of their wishes — not our own opinions, prejudices or biases. In light of the crisis of equality in which our nation is currently embroiled, I recommend that everyone take the time to revisit the Fair Housing Act to ensure that we are not guilty in any way of housing discrimination.
Recommended resources:
- Housing Discrimination Under The Fair Housing Act
- Steer Clear of “Steering”
- NAR Fair Housing
- NAR’s Fair Housing Action Plan (ACT Initiative)
- NAR Fair Housing Declaration
- NAR Fair Housing Resources
Carl Medford is the CEO of The Medford Team.
