What is steering in real estate?
- In real estate, steering is the practice of guiding prospective residents to certain neighborhoods or away from other neighborhoods or areas based on their identity as part of a protected class such as race..
- 1 What is steering and blockbusting?
- 2 Why do Realtors steer?
- 3 What is steering in property management?
- 4 What does Steering mean in lending?
- 5 Which is an example of steering?
- 6 Which situation is an example of steering?
- 7 Do Realtors still engage in steering?
- 8 Is steering against the law?
- 9 What is the difference between steering and redlining?
- 10 What is familial status?
- 11 What does redlining mean in real estate?
- 12 What is panic selling in real estate?
- 13 Is mortgage steering illegal?
- 14 What is a panic peddling?
- 15 What does blockbusting mean in real estate?
- 16 What is Steering in Real Estate?
- 17 What Is Steering in Real Estate?
- 18 What Is Steering in Real Estate?
- 19 What Your Real Estate Agent Can’t Talk About
- 20 What Your Agent Should Do Instead
- 21 What to Do if You Have a Biased Real Estate Agent
- 22 Find an Agent You Can Trust
- 23 Real Estate Definition of Steering by Crepedia
- 24 Steering – Discriminatory And Prohibited
- 25 What is Steering in Real Estate – How to Avoid It?
- 26 What is racial steering?
- 27 When was racial steering made illegal?
- 28 How does steering happen?
- 29 Study Results
- 30 What’s the solution?
- 31 Understand Best Practices
- 32 What is blockbusting?
- 33 Other Illegal Real Estate Practices
- 34 How to Identify and Combat Racial Steering in Real Estate
- 35 What Is Steering in Real Estate?
- 36 What Are the Consequences of Steering?
- 37 How to Tell If You’re Being Steered
- 38 What to Do If You’re a Victim of Steering
- 39 Steering Definition
- 40 Deeper definition
- 41 Steering example
- 42 What does Steering mean in real estate? – Kitchen
- 43 What is steering in real estate?
- 44 What is steering and blockbusting?
- 45 What is steering in property management?
- 46 What does Steering mean in lending?
- 47 Why do Realtors steer?
- 48 Which of the following is an example of steering?
- 49 What is steering and redlining in real estate?
- 50 What does redlining mean in real estate?
- 51 Is steering legal?
- 52 What is familial status?
- 53 What is panic selling in real estate?
- 54 Why does the Fair Housing Act prohibit steering?
- 55 Is mortgage steering illegal?
- 56 What is illegal real estate?
- 57 What does blockbusting mean in real estate?
- 58 Redlining, Blockbusting & Steering: Definition & Differences – Video & Lesson Transcript
- 59 Blockbusting
- 60 Avoid Fair Housing Act Violation for Steering
- 61 What to Look for in Your Marketing Materials
- 62 How to Respond to Client Questions and Requests
- 63 Mortgage Steering Definition
- 64 How Mortgage Steering Works
- 65 Growth of Mortgage Steering
- 66 Predatory Lending Practices
- 67 Subtle versus Outright Steering
- 68 Avoiding Mortgage Steering
- 69 Newsletter – Nuances of Steering and Blockbusting
- 70 ‘Steering’ in Real Estate (and What to do About it)
What is steering and blockbusting?
There are various controversial acts related to real estate practices that often infringe upon rights and quickly become illegal. Explore the practices of redlining (discrimination), blockbusting (pressuring to sell cheap), and steering ( pushing for race-specific neighborhoods ).
Why do Realtors steer?
This is typically thought to affect home buyers more often than sellers, as an agent could guide or “steer” them toward or away from certain communities based on bias. Basically, if an agent, because of bias, assumes what a buyer or seller wants or doesn’t serve clients equally, they’re in the danger zone.
What is steering in property management?
In the real estate world, “steering” is when an agent or broker tries to guide a buyer to or away from a particular area or neighborhood based on their race or religion. This practice is discriminatory and is an infringement of rights.
What does Steering mean in lending?
Steering is simply a loan applicant being guided into a particular loan product that may have less favorable terms or conditions than an alternative product.
Which is an example of steering?
Steering occurs, for example, when real estate agents do not tell buyers about available properties that meet their criteria, or express views about communities, with the purpose of directing buyers away from or towards certain neighborhoods due to their race or other protected characteristic.
Which situation is an example of steering?
Steering is when a real estate agent influences a homebuyer to purchase in certain communities based on their race, therefore limiting the buyer’s choices. Let’s look at a hypothetical example of steering: a white buyer and a Black buyer approach the same real estate agent looking to buy homes.
Do Realtors still engage in steering?
Some real estate agents still engage in illegal steering, either due to bias, or for reasons ranging from an ill-advised urge to “help” buyers and sellers, to a desire to increase sales and commission income.
Is steering against the law?
Steering, or trying to influence somebody toward or away from a particular property or neighborhood based on one of the protected characteristics, is illegal under the Fair Housing Act.
What is the difference between steering and redlining?
Steering is the illegal practice of channeling home seekers to particular areas, either to maintain the homogeneity of an area or to change the character of an area, which limits their choices of where they can live. It is a form of redlining.
What is familial status?
Familial status covers: families with children under the age of 18, pregnant persons, and. any person in the process of securing legal custody of a minor child (including adoptive or foster parents).
What does redlining mean in real estate?
Redlining. Redlining is the practice of denying a creditworthy applicant a loan for housing in a certain neighbor hood even though the applicant may otherwise be eligible for the loan.
What is panic selling in real estate?
Essentially, panic selling in real estate occurs when an investor or homeowner offloads one or multiple properties quickly, and often for less than market value. The panic is often incited by an economic or emotional, wide-spread incident.
Is mortgage steering illegal?
Mortgage steering is illegal, with the federal Real Estate Settlement Procedures Act forbidding any variation of it. Real estate agents may offer their potential buyers information about mortgage companies and loans, of course. But real estate agents and brokers can’t push buyers toward any particular mortgage lender.
What is a panic peddling?
Panic peddling refers to a profitable ploy by unscrupulous real estate agents who suggest to homeowners that they move before their property values decline because the neighborhood`s racial composition is changing.
What does blockbusting mean in real estate?
Blockbusting refers to the practice of introducing African American homeowners into previously all white neighborhoods in order to spark rapid white flight and housing price decline. Real estate speculators have historically used this technique to profit from prejudice-driven market instability.
What is Steering in Real Estate?
Steering in real estate is one of the ethical issues that come up throughout the course of a real estate agent’s work, and it is discussed in this article. Knowing what steering is can help you be a better, more ethically conscious real estate agent, whether it’s comprehending the topic to pass the state test or detecting it being practiced throughout the world. To learn more about steering, and how it affects the industry, continue reading.
What is Steering?
“Steering” is a term used in the real estate industry to describe when an agent or broker attempts to steer a client toward or away from a specific location or neighborhood based on the buyer’s ethnicity or religion. This practice is discriminatory and is a violation of human rights. The reason for this is because discrimination is against the law, immoral, and racist in nature.
The Fair Housing Act
While we were living in a world that was mainly divided throughout the 1960s, this type of prejudice became increasingly common. That changed when the Civil Rights Act, which contained the Fair Housing Act, was passed in 1968 by the United States Congress. The Fair Housing Act makes it unlawful to discriminate against anybody on the basis of race, religion, or national origin in any aspect of the sale, rental, or financing of housing under certain conditions. The Fair Housing Amendment Act of 1988 expanded the definition to include factors such as age, gender, and disability status.
Redlining is a kind of discrimination in which mortgage lenders refused to provide loans or extend credit to borrowers who lived in specific parts of town as a result of their location.
Examples of Steering
While we were living in a world that was mostly divided throughout the 1960s, this type of prejudice was commonplace. That changed when the Civil Rights Act, which includes the Fair Housing Act, was passed in 1968 by the federal government. The Fair Housing Act makes it unlawful to discriminate against anybody on the basis of race, religion, or national origin in any aspect of the sale, rental, or financing of housing under certain circumstances. This definition was expanded to include factors such as age, gender, and disability status by the Fair Housing Amendment Act of 1988.
Redlining is a kind of discrimination in which mortgage lenders refused to provide loans or extend credit to borrowers who lived in specific parts of town because of their financial circumstances.
How to Avoid Steering
How can you, as a real estate agent, ensure that you are not breaching the law while yet providing true service to your clientele?
First, agents must educate themselves on this sort of prejudice and learn how to prevent it while working with homebuyers in order to be successful at their jobs. There are certain easy and fundamental things that you may do to help yourself attain this goal.
HAVE GOOD COMMUNICATION
Having strong communication with your client is the first step in achieving success. Begin by listening, which will lead to a comprehension of the situation. When you talk, make sure you are clear and succinct. In order to be certain that you are hearing someone accurately, summarize what you have heard in response to their words. Putting all of these abilities into practice will ensure that you and your customer are constantly on the same page.
ASK SPECIFIC QUESTIONS
Having effective communication with your client is the first step in achieving results. To begin, focus on listening, which will eventually lead to comprehension and acceptance. Maintain clarity and succinctness throughout your speech or presentation. Make a brief summary of what you have heard in response to make sure you are hearing someone accurately. You’ll be on the same page as your customer all of the time if you put all of these abilities to work.
MAKE IT ABOUT THE PROPERTY
When you provide your customer with all of the available housing options, you will not have any problems with steering. Concentrate on locating houses that meet the requirements established by your customer. Don’t make educated guesses about whether or not your client will want to visit a house in a certain neighborhood. Simply show all of the available homes in each area, district, and neighborhood, and let your customer to determine which location is the most desirable for them to call home.
Remember that it is up to your customer to decide where they want to live and where they do not want to reside. Keep yourself out of problems and don’t make their decision for them. The only steering you should be concerned with is directing yourself away from discrimination and into acceptance. Is it possible that you’ve been the victim of “real estate guiding” during house hunting? Please tell us about your experience and views. Every week, we provide in-depth videos on our CA Realty Training YouTube Channel to assist viewers in becoming great real estate agents.
Also, if you found this post interesting, we would appreciate it if you could forward it to a friend who you believe may benefit from it.
What Is Steering in Real Estate?
Is it possible that you’ve been perplexed as to why a real estate agent has refused to explicitly answer one of your questions? What are the greatest schools in my city, and where can I find them? orIs this area a safe place to live? It may appear that the problem is straightforward to resolve. However, if your real estate agent isn’t providing you with a straightforward response, it’s possible that they aren’t a cornflake after all. In reality, it’s probable that they’re attempting to avoid steering in the real estate market.
What Is Steering in Real Estate?
Real estate steering occurs when a real estate agent has an impact on a client’s decision based on one of the qualities mentioned in the Fair Housing Act—things like color, religion, gender, handicap, family status, or nationality—in order to obtain a better deal. 1 This is often assumed to effect house purchasers more frequently than home sellers, since an agent might direct or “steer” them toward or away from specific neighborhoods depending on their own personal bias and prejudices. However, a seller might be “steered” towards considering bids or possible purchasers as a result of their own prejudice.
Basically, if an agent guesses what a buyer or seller wants because of bias, or if they don’t treat all of their customers fairly, they are in danger of being sued. This is due to the fact that (you guessed it) guiding in real estate is banned in the United States—and for good reason.
Why Is Real Estate Steering Illegal?
It’s time to get your pencils out, students. It’s time for a history lesson. Imagine you’re transported back in time to the 1960s, a period when civil rights, rock ‘n’ roll, and Audrey Hepburn’s every move were topics of conversation: the 1960s. In 1964, President John F. Kennedy signed the Civil Rights Act, but minority groups were frequently denied access to housing and employment opportunities in some neighborhoods as a result of discriminatory practices. 2 Find a reputable real estate agent in your neighborhood that we suggest.
The Fair Housing Act expressly prohibits discrimination in the sale, rental, and financing of housing on the basis of race, religion, national origin, gender, disability, and family status, which includes real estate steering, in the sale, rental, and financing of housing.
What Your Real Estate Agent Can’t Talk About
A certain amount of real estate steering is obvious as day. Examples of red flags to look out for when driving include:
- Assuming that consumers desire to purchase a home in a community where the majority of the residents are of the same religion or race, The act of diverting a consumer from one place to another because of “better schooling”
- When it comes to single women, only particular properties are shown to them depending on her perceived capacity to handle them.
Now, these are fairly apparent instances, but real estate steering is not always as straightforward as it appears. Even if your real estate salesperson expresses a casual opinion about a neighborhood, it may be in violation of the law. Good real estate brokers will pause before responding to queries and will refrain from answering some ones altogether. In this section, you’ll find some of the most prevalent no-no issues that you’ll likely want to learn about as a house buyer, but that your agent will keep under wraps:
- Afraid of the crime rate in a new place? It’s quite reasonable to be concerned about the rate of crime in a new area. According to the Fair Housing Act, crime statistics, depending on how they are framed, might fall into slippery area in some cases. 5 Rather of directly responding to queries regarding crime, your agent can lead you to public record resources such as the local government’s website or the Neighbors app, where you can do your own investigation. School systems include the following: However, your real estate agent is unlikely to be of much use in finding you a junior position at the finest and brightest school in the area, which we understand. Agents are unable to comment on the reputation of a school system, but they can remark on publicly available facts such as test results or programs offered by a school. Make some preliminary research to determine which schools are a good match for your child, and then organize a visit of those schools. Even if a school appears to be promising on the internet, you won’t know how it is unless you visit it in person. Consider the following scenario: you’re nearing retirement and seeking for a neighborhood that isn’t dominated by young families. No harm in that, but a real estate agent wouldn’t be able to tell you that a particular neighborhood “isn’t suited for someone your age.” Fortunately, finding out what the people who reside in a particular place are like is not difficult. Pay a visit to the neighborhood you’re interested in and talk to the people who live there about their lives. Alternatively, you may join local Facebook groups to find out what the people are like. If this helps you establish a common ground with other homeowners your age, that’s fantastic! Inform your real estate agent that you wish to concentrate your efforts there. Places of worship include: Realtors can supply you with a list of places to worship, but that’s about it, because the Fair Housing Act protects persons who fall into protected groups such as religion from being discriminated against in the housing market. If being close to a trustworthy house of worship is a must-have for you, a smart starting step could be to inquire with the leaders at your present place of worship about any connections they may have in the area where you’re going.
What Your Agent Should Do Instead
Your real estate agent wants to be of service to you, but he or she also wants to prevent real estate guiding and make the transaction lawful. Knowing this up front will assist you in respecting your agent’s professional limits and will also assist you in recognizing when they are (or are not) respecting your professional boundaries. Don’t get us wrong: your agent can and should provide you with information about various communities. In fact, they should be true authorities on the subject matter!
Thus, an agent avoids the possibility of imposing their own personal bias, and the conclusions you reach are the only things that lead or steer (this time, in a positive way) your transaction in the right direction.
What to Do if You Have a Biased Real Estate Agent
Speaking with your agent about statements they’ve made that have raised an eyebrow may be sufficient to resolve the situation without having to fire them out of hand completely. Some situations necessitate referring back to the words of the Bible, which state that “the tongue communicates what the heart is full of” (Luke 6:45, NIV). That implies that if an agent is conveying prejudice, it’s likely that their heart is full of it, and it’s time to terminate their employment. However, you must exercise caution and thoroughly study your contract.
The first thing you should do is contact with the agent’s broker and request that you be released from the contract.
If it doesn’t work, it may be necessary to retain the services of an attorney.
In the event that your agent had any integrity at all, this should not have come to this. In the interim, you can begin the process of interviewing potential replacements.
Find an Agent You Can Trust
Speaking with your agent about statements they’ve made that have raised an eyebrow may be sufficient to resolve the situation without having to fire them outright in certain circumstances. Some situations need referring back to the words of the Bible, which state that “the tongue communicates what the heart is filled with” (Luke 6:45, NIV). In other words, if an agent is expressing bias, it’s likely that their heart is full of prejudice, and it’s time to terminate them. To avoid this, you must be cautious and thoroughly study the contract.
You should communicate with the agent’s broker as soon as possible and request that you be released from the agreement.
Then it may be necessary to seek the assistance of an attorney.
In the event that your agent had any integrity, this should not have come to this.
Real Estate Definition of Steering by Crepedia
- Steering is an unlawful activity in real estate brokerage and sales that involves showing potential customers houses in specific locations while avoiding showing them properties in other areas that they may be qualified for or interested in. When it comes to nature, steering is seen as discriminating. Real estate brokers have learnt the hard way that directing customers away from specific communities based on their race is against the law.
steering | Fair Housing, Discrimination, and Ethics in the Real Estate Industry
Steering – Discriminatory And Prohibited
steering | Fair Housing, Discrimination, and Ethics in the Real Estate Industry.
What Is Steering?
Steering is the practice of directing prospective homeowners or occupants to specific neighborhoods or areas and directing them away from other neighborhoods or regions based on their status as a member of a protected class such as race.
Why Is Steering Discriminatory?
As a matter of principle, guiding is discriminatory, and it may prevent someone from locating the property that they would have wanted or that would have best fit their needs and requirements. The reason for this is that the client is initially offered with options based on their identify as a member of a group of individuals who have been discriminated against. In addition, the practice reinforces the division of individuals into different social classes and geographical locations.
Steering Is Prohibited In the United States
Steering has been forbidden in the United States as part of the continuous campaign to eradicate discrimination in the workplace. A succession of pieces of legislation that come together to form the Fair Housing Act, which outlines which groups of individuals are protected from being steered, has been passed at the federal level, making steering illegal.
Fair Housing Protected Classes
Protected classes are defined by the Fair Housing Act as follows:
- Following are examples of protected classes according to the Fair Housing Act of 1968:
Steering has also been made illegal at the state level through legislative action. For example, the Unruh Civil Rights Act, which was passed in 1959, prohibits the practice of guiding in the state of California.
The legislation prohibits discrimination by enterprises in California, and it applies to real estate brokerage services as well. The techniques of redlining and blockbusting are two more types of discriminatory practices that have been prohibited in the United States.
What is Steering in Real Estate – How to Avoid It?
Beginning with the founding of the United States, racially segregated communities have grown in popularity. The majority of today’s housing difficulties are the consequence of discriminatory zoning regulations enacted in the 1920s and 1930s, as well as urban renewal legislation enacted in the 1940s and 1950s. However, it wasn’t until the Civil Rights Movement that significant changes in the way community development was conducted began to occur. These neighborhoods’ demographics have stayed unchanged despite changes in the rules that govern them.
The practice of racial steering, on the other hand, is a primary action that contributes to this problem.
What is racial steering?
It is illegal to steer homebuyers or renters toward or away from specific neighborhoods, areas, or communities based on their race, color, national origin, religion, sexual orientation, familial status or any other characteristics that are protected under fair housing laws. Steering is prohibited by federal and state fair housing laws. Fair housing rules were established in order to provide all groups of people with equal access to housing and to protect them from being discriminated against.
Despite the fact that there are several laws and Supreme Court judgments prohibiting this practice, it is a systemic problem that affects many real estate transactions.
When was racial steering made illegal?
Fair Housing Act of 1968 outlaws discrimination in the sale, rental, and financing of homes and other housing-related transactions on the basis of race, color, religion, sexual orientation, family status, national origin, or handicap. “It also mandates that all government initiatives connected to housing and urban development be handled in a way that actively promotes fair housing.” During the administration of President Lyndon B. Johnson, this statute was signed into effect, and it was critical in expanding government support.
This includes racial steering in the real estate industry.
How does steering happen?
Steering may occur in a variety of situations and under a variety of conditions. Prospective buyers frequently inquire about school systems and neighborhood safety. Responsible real estate brokers make it a point to keep to the facts and refer buyers to numerous websites that provide information on school rankings or crime statistics without expressing their own opinions. Homebuyers must seek out this information from other sources if they are interested in doing so. Jacob Faber, an assistant professor of sociology at New York University who studies segregation, and coauthor Max Besbris wrote in a 2017 research paper, “Investigating the Relationship Between Real Estate Agents, Segregation, and House Prices: Steering and Upselling in New York State,” that real estate agents have strong incentives to steer customers by race and that doing so preserves racial differences in the accumulation of wealth.
They conducted 45 interviews with real estate agents in New York State while concealing the agents’ names.
Some agents acknowledged to directing consumers, claiming that it was in the best interests of both buyers and sellers. Agents are compared. Save tens of thousands of dollars. Find a real estate professional who can point you in the correct path.
In many different situations and situations, steering is possible. School systems and neighborhood safety are frequently inquired about by potential homebuyers Realtors that are responsible adhere strictly to the facts and refer consumers to a variety of websites for information on school rankings or crime statistics without adding their own opinions. Homebuyers must obtain this information from other sources if they are interested in purchasing a house. Jacob Faber, an assistant professor of sociology at New York University who specializes in segregation, and coauthor Max Besbris wrote in a 2017 research paper, “Investigating the Relationship Between Real Estate Agents, Segregation, and House Prices: Steering and Upselling in New York State,” that real estate agents have strong incentives to steer customers by race and that doing so preserves racial differences in the accumulation of wealth for themselves and their clients.
While keeping the agents’ names confidential, they questioned 45 real estate agents in New York State.
Agents should be compared.
Find a real estate professional that can point you in the correct way.
What’s the solution?
It’s difficult to give a definitive response to this issue because many real estate brokers have no purpose of directing yet end up doing so without even recognizing it. It is vital to raise awareness among those who fall under this category. There are many things that can be uttered innocuously that might be taken in a different and discriminating way. Agents must make a concerted effort to avoid answering some inquiries while maintaining the aim of giving value to your experience as a customer.
Many agents are aware of the laws and choose to disregard them, although they do it in a subtle manner most of the time.
If you have any reason to suspect that a real estate agent is attempting to influence you as a buyer, you should immediately terminate your relationship with them.
Understand Best Practices
When it comes to directing, a real estate agent that follows the following best practices will be working in your best interests:
- Provides you with listings that are solely based on your objective criteria. When you use ambiguous phrases such as “pleasant,” “good,” or “safe,” the realtor will ask you a series of neutral questions to better grasp your requirements, such as the property’s attributes and price range. The agent will provide you with objective information on communities and point you in the direction of third-party sites that provide neighborhood-specific information.
What is blockbusting?
Blockbusting is another criminal technique that is connected to the one mentioned above. Using the argument that the neighborhood’s demography is changing and that this would affect the value of their home, blockbusting is a method of influencing residents to sell or rent their properties at a lesser price. In reality, it will have no effect on the value.
Since the passage of the Fair Housing Act in 1968, it has been unlawful to participate in blockbusting practices. Blockbusting is also racist, anti-Semitic, homophobic, and other forms of discrimination that should not be accepted under any circumstances.
Other Illegal Real Estate Practices
Agents are forbidden from engaging in other illicit real estate activities, according to the National Association of Realtors (NAR). Real estate agents are supposed to follow specific regulations and laws, which are outlined in the Code of Ethics and Standards of Practice. Some of the things they are supposed to refrain from doing are as follows:
- Homeowners are being misled about the market worth in order to obtain a listing
- Providing false information to purchasers or tenants regarding savings or other benefits
- They are taking their time in submitting proposals on their clients’ behalf
- Breaching their client’s confidential connection without their knowledge
- Managing the property in a manner that might jeopardize the rights, safety, and health of renters and others is strictly prohibited. They are withholding information that is relevant to their customer
If you are concerned about the real estate agent with whom you are dealing, UpNest can assist you by presenting you with a selection of reliable agents who will assist you in finding your perfect property to buy or sell.
How to Identify and Combat Racial Steering in Real Estate
Photographs courtesy of Getty Images We aim to make it easier for you to make better informed decisions. Some of the links on this page — which are clearly indicated — may direct you to a partner website, which may result in us earning a commission for referring you. More information may be found under How We Make Money. Housing discrimination continues to exist, despite the fact that it has been illegal for many years. Many times, the housing alternatives and information available to consumers are restricted because of the potential homebuyer’s ethnicity, religion, or sexual orientation.
Many people’s problems have been compounded by the present political climate.
Thompson, national executive director of the National Association of Real Estate Brokers: “COVID has hastened the problem of steering and discrimination” (NAREB).
What Is Steering in Real Estate?
‘Steering’ is a kind of discrimination in which a real estate agent attempts to influence someone’s housing decision on the basis of their race, religion, or any protected trait protected by the 1968 Fair Housing Act. The following are nationally protected classes:
- Race, color, religion, national origin, and sexual orientation (including gender identity) are all factors to consider. Status of the family
Homebuyers are not the only ones who are affected by steering, and while it is most usually connected with them, the influence extends well beyond that. Individuals who are searching to rent or locate public housing are likewise subject to this form of prejudice. The Department of Justice has filed a lawsuit against an Alabama public housing authority for discriminating against public housing applicants on the basis of race. Steering can take place anywhere, including inside a community, an apartment complex, or even within one building.
” or to direct individuals from a particular background or family composition to specific apartments while keeping them away from others,” says Bryan Greene, vice president of policy advocacy for the National Association of Realtors.
“The Fair Housing Act addresses each and every one of these abuses.”
What Are the Consequences of Steering?
A good example of the influence of steering may be found in the persistence of racially segregated communities and housing. According to Greene, “a variety of factors, not only steering, have led to current segregation.” However, steering “maintains existing demarcation lines that were sometimes set by racially discriminatory covenants, or even violence,” he explains. The rate of homeownership is one area in which the impacts of segregation and housing discrimination may be observed, and it is a good example of this.
- Someone else is making your decision for you, rather than you making your own decision.
- Current homeownership percentages between Black and white Americans are roughly the same as they were in 1960, before the passage of the Fair Housing Act, according to the National Association of Real Estate Brokers’ most recent State of Housing in Black America study (PDF).
- Thompson claims that depreciation “depreciates assets in particular locations.” The average Black homeowner owns a home that is valued 45 percent less than the average white homeowner, and he or she is more likely to have seen a fall in the value of their property.
- The median household for white Americans has a net worth that is eight times more than the median household for black Americans and five times greater than the median household for Hispanic Americans.
How to Tell If You’re Being Steered
It’s not always evident when you’re being led in a certain direction. “If you’ve requested to view houses and haven’t specified which neighborhoods you’re interested in, and you discover that an agent is only showing you properties in a single region or subset of the communities you’ve indicated an interest in, you can be the victim of steering,” Greene says. The fact that you are only being presented housing alternatives in locations where the demographics match your ethnic or religious background should raise serious concerns.
Using the facts they supply, or withhold, they can have an impact on your decision without ever mentioning race or religion.
However, according to the findings of the same research, “.did not have the same dialogue with Hispanic or Black consumers.” So, if the objective source of worry was the quality of the schools, they only felt it necessary to disclose it to white buyers,” Greene explains.
The way a community is described can have an unjustly negative impact on your decision about where to live in that town.
However, you should make a complaint and offer evidence in addition to looking for another agent to deal with.
What to Do If You’re a Victim of Steering
If you suspect you have been the victim of steering, you should register a complaint with the appropriate authorities. “That’s the first and most important thing they should do,” Thompson advises. The following are some of the organizations that can aid you in making a formal complaint:
- A state or municipal human rights agency, the National Association for the Advancement of Colored People (NAACP), the National Association of Real Estate Brokers (NAREB), the Department of Housing and Urban Development (HUD), the National Fair Housing Alliance (NFHA), and other organizations
Understanding the housing discrimination rules in your state and local jurisdiction is also critical. Other qualities, such as age, source of income, and pregnancy, may also be included by these rules. If possible, you should collect as much proof of steering as you are able. The ideal situation is for people to do as much as they can at the time of an event to film and expose what they feel is taking on, according to Greene. The use of testing is one method for documenting steering and providing unambiguous proof.
Despite the fact that some people have achieved this task on their own, it is most typically completed with the assistance of a local housing organization or government agency.
Depending on the seriousness of the crime, the victim may be subjected to penalties, license suspension, and monetary compensation.
“We need to increase the consequences for real estate agents who discriminate against their clients,” Thompson adds.
Driving a potential homebuyer towards or away from an area on the basis of the presence or absence of members of protected classes is referred to as “steering.”
Real estate agents are prohibited from participating in guiding under the Federal Housing Act. Agents are not permitted to “steer” purchasers away from particular communities on the basis of the following criteria:
- Race, color, religion, sexual orientation, family status, national origin, and disability are all factors to consider.
At its inception, the Federal Housing Act’s provisions were intended to combat housing discrimination and guarantee that people of all socioeconomic backgrounds had access to affordable housing options. Realtors must use caution when sharing information about a neighborhood’s demographics, since authorities may interpret this as exhibiting preference for a certain set of individuals. It is crucial to remember that it is not unlawful for a homebuyer to seek out or avoid an area because they are looking for or avoiding members of a protected class.
Unless you are actually from Puerto Rico, it is against the law for your real estate agent to attempt to encourage you to relocate to an area where there is a high concentration of immigrants from that country. If you prefer a community with specific demographics, you may discover more about the features of a neighborhood by visiting the United States Census website. Assume you have young children and wish to live in a community where there are other young families to play with. If you request that your real estate agent show you properties in neighborhoods that are popular with families with children, your agent will not be able to comply since family status is a protected class under the Fair Housing Act.
Is it time to take the next step? Mortgage rates in your location should be compared in order to obtain the most favorable conditions for your loan.
What does Steering mean in real estate? – Kitchen
If you are originally from Puerto Rico, it is against the law for your real estate agent to attempt to encourage you to relocate to an area where there is a high concentration of Puerto Rican immigrants. Use the U.S. Census website to learn about the features of a neighborhood if you have a preference for one with certain demographics. Assume you have young children and wish to live in a community where there are other young families to play with them. Your real estate agent will not be able to oblige you if you ask him or her to show you properties in neighborhoods that are popular with families with children, because family status is a protected class under the law.
To receive the best conditions for your mortgage, compare mortgage rates in your region.
What is steering in real estate?
In the real estate industry, steering is a kind of discrimination in which a real estate agent attempts to influence someone’s housing decision based on their race, religion, or another protected trait protected by the 1968 Fair Housing Act.
What is steering and blockbusting?
Blockbusting. Unlawful activity in which licensees or others push homeowners to sell in response to an increase or anticipated inflow of minorities into a community redlining. The practice of a lender refusing to lend in a certain location, usually because the area has a high concentration of minorities, is known as affirmative action lending. steering.
What is steering in property management?
“Steering” is a term used in the real estate industry to describe when an agent or broker attempts to steer a client toward or away from a specific location or neighborhood based on the buyer’s ethnicity or religion. This practice is discriminatory and is a violation of human rights.
What does Steering mean in lending?
Steering is simply the process of guiding a loan applicant into a certain loan product that may have less favorable terms or conditions than an alternative product available to them.
Why do Realtors steer?
In the real estate industry, steering occurs when a real estate salesperson urges a customer to purchase in a certain community because of their race, therefore restricting the buyer’s options. Clients are directed to communities depending on their race by real estate agents.
Which of the following is an example of steering?
Which of the following is a good illustration of directional control? Steering is the act of directing potential buyers toward or away from specific communities or locations. Redlining is the practice of refusing to give loans to people who own property in specific locations.
What is steering and redlining in real estate?
A practice known as steering is the illegal activity of routing house searchers to certain regions in order to maintain the homogeneity of an area or modify the character of an area, so restricting their options for where they can reside. It is a sort of discrimination.
What does redlining mean in real estate?
Redlining is the practice of rejecting a creditworthy applicant a loan for housing in a certain neighborhood, even if the application is otherwise suitable for the loan, because the applicant lives in the neighborhood.
Is steering legal?
It is illegal to steer a potential buyer or tenant’s decision, and any comments or acts used by a real estate sales agent or broker with the intent of influencing the decision are considered to be steering.
Steering is a violation of federal fair housing laws, which prohibit discrimination in the sale or rental of residential property.
What is familial status?
Any comments or acts used by a real estate sales person or broker with the intent of influencing the decision of a prospective buyer or tenant are considered to be steering, which is a criminal offense. When steering is used, it is in violation of federal fair housing laws, which prohibit discrimination in the sale or rental of real estate.
What is panic selling in real estate?
In the real estate industry, panic selling is a phenomena that happens when an investor or homeowner sells their property hastily and without respect for current market conditions. For example, when several well-known financial institutions began to fail during the 2007 financial crisis, there was a great deal of panic selling in the market place.
Why does the Fair Housing Act prohibit steering?
In the real estate industry, panic selling is a phenomena that happens when an investor or homeowner sells their property hastily and without respect for current housing values. For example, when several well-known financial institutions began to fail during the 2007 financial crisis, there was a great deal of panic selling.
Is mortgage steering illegal?
Mortgage steering is prohibited by the federal Real Estate Settlement Procedures Act, which also prohibits any variant of the practice. Of course, real estate brokers may provide their prospective purchasers with information on mortgage businesses and loans. However, real estate agents and brokers are not permitted to direct customers to a certain mortgage company.
What is illegal real estate?
What is the definition of unauthorized property possession? An unlawful occupation of real estate is defined as the occupation of a property by a person who is not the legal owner and does so without the owner’s agreement. The agreement would be legitimate as long as the resident has the approval of the property owner to utilize the premises, according to the law.
What does blockbusting mean in real estate?
Blockbusting is the practice of bringing African American homeowners into historically all-white communities in order to cause fast white flight and a drop in the value of existing housing stock and properties. Historically, real estate speculators have utilized this strategy to profit from market volatility caused by discriminatory attitudes.
Redlining, Blockbusting & Steering: Definition & Differences – Video & Lesson Transcript
As a lender, Larry is adamant about not lending any money to anyone who lives in or wishes to purchase property in one of the city’s poorest districts. When Larry engages in redlining, he is doing a deceptive and discriminatory behavior that is common among financial service providers, such as mortgage lenders and insurance firms, but is prohibited by federal and state law. Because of a high default rate in the neighborhood, these enterprises make it hard or almost impossible for people living in low-income districts in the ‘inner city’ to get a house loan, mortgage, or other financial product through a financial institution.
There is nothing wrong with rejecting a loan to someone who is otherwise eligible, but it is utterly immoral to deny a loan to someone who is otherwise qualified merely because he lives “on the other side of the tracks.” The passage of the Community Reinvestment Act has assisted in reducing the prevalence of this practice, although it has not been fully eliminated.
A more complicated definition is that blockbusting is an illegal practice in which someone coerces homeowners into selling their property for less than its fair market value by scaring them into believing that their home values are about to plummet as a result of a group of people of a particular race, religion, or national origin moving into the neighborhood. Once the houses have been sold, these unscrupulous individuals profit by selling them at inflated rates, frequently to the exact same group of people who were hired to terrify the prior owners into selling.
Avoid Fair Housing Act Violation for Steering
Avoiding “steering” is one of the most important things you can do to help prevent Fair Housing Act claims. Discrimination in home sales, rents, and financing is prohibited under the Federal Fair Housing Act, which forbids discrimination on the basis of race, color, national origin, religion, sex, family composition (if there are children), and handicap. Keep in mind that some states have passed legislation that protects various groups of persons as well as individuals. Steering, or attempting to steer someone toward or away from a specific property or area based on one of the protected qualities, is prohibited under the Fair Housing Act and is punishable by law.
Marketing materials and how you reply to client concerns or requests are two areas where you run the risk of putting yourself in danger.
What to Look for in Your Marketing Materials
Using certain terminology in your property advertising and promotion might result in you being in violation of the Fair Housing Act without even recognizing it. You should refrain from using discriminating terminology such as “only singles” or “no children.” You should refrain from using terminology that refers to the ethnic or racial character of a neighborhood. Aside from that, making reference to a specific church, temple, or mosque may be difficult.
How to Respond to Client Questions and Requests
Trying to dissuade an African-American family from purchasing a property in a predominantly white community that fulfills their requirements is a difficult challenge. “However, what if someone expresses a desire to reside in a predominantly Hispanic neighborhood?” Selling property based on race, ethnicity, proximity to a temple or church, or location in a “good” school district might get you in hot water with the local real estate commission. In order to fulfill both the demands of your clients and the obligations of the law, you must figure out how to respond to these sorts of requests from them.
So, if they want to live in a community with a certain religious, racial, age, or cultural mix, ask them where they’d like to look—for example, on specific streets or in specific zip codes—and then listen carefully.
- It is difficult to dissuade an African-American family from purchasing a property in a predominantly white community that fulfills their needs. “However, what if someone expresses a desire to reside in a Hispanic neighborhood?” Selling property based on color, ethnicity, proximity to a temple or church, or location in a “good” school district might get you in hot water with the local real estate board. In order to fulfill both your clients’ demands and the obligations of the law, you must figure out how to respond to these sorts of requests from them. Inquire about the parameters of the search and request that they be defined. For example, if they wish to live in an area that has a certain religious, racial, age, or cultural mix, ask them where they’d want to look—for example, on specific streets or inside certain zip codes. Similar to this, don’t direct persons with disabilities or families with children toward certain homes unless the client has specified a demand, such as “I require a ground-floor building or one with an elevator,” or “We want to avoid properties on Route 5 because of the traffic,” etc. Keep an eye out for queries like these, among others.
Rather of interpreting data for customers, encourage them to look up school evaluations, crime figures, and other relevant information for themselves. You can utilize disclosure notices with customers to ensure that they are made aware in writing of their responsibilities to conduct additional study in these areas. Identifying some of the most subtle infractions of the Fair Housing Act’s steering clause can assist you in avoiding difficulties in the future. If you receive a complaint alleging that you have violated the Fair Housing Act, you will need to seek legal counsel.
Please notify us as soon as possible if you have received a complaint or have a legal issue, even if the complaint or legal worry has not yet been formalized.
What language or practices have you modified in order to comply with the Fair Housing Act?
Mortgage Steering Definition
Young couple receives a set of keys from a real estate agent in their first home. The image is courtesy of Andrey Popov/iStock/Getty Images. Certain real estate ads have stipulated that prospective purchasers must first be authorized by the seller or, in some cases, a specific lender before they can proceed with the purchase. At first look, asking a prospective buyer to obtain clearance from a property seller or a lending institution may appear benign. However, property listing statements that require a buyer to obtain prior clearance from a property seller or a lender are considered “mortgage steering,” and are thus unethical and illegal.
How Mortgage Steering Works
In the real estate industry, mortgage steering happens when real estate salespeople direct purchasers to mortgage providers that they suggest. The majority of the time, real estate salespeople have links with certain mortgage businesses, and they use that influence to coerce buyers into using those lenders only. The practice of mortgage steering occurs when a real estate agent or broker directs a customer toward a certain home and into a mortgage that the buyer cannot properly pay.
Growth of Mortgage Steering
As a result of certain real estate salespeople and mortgage brokers pressuring low-income purchasers into loans they couldn’t pay, mortgage steering became popular in the twenty-first century. Primary purpose of mortgage steering was to persuade customers to take up subprime, high-interest-rate loans from a variety of mortgage providers, which were offered at a discount. The unintended consequence of mortgage steering, on the other hand, was the near-collapse of the subprime lending sector.
Since the near-collapse of the subprime mortgage industry, the government’s monitoring of real estate operations has significantly curtailed, if not entirely eliminated, the practice of mortgage guiding.
Predatory Lending Practices
During the twenty-first century, some real estate salespeople and mortgage brokers began pressuring low-income purchasers into taking out loans that they could not afford. The primary purpose of mortgage steering was to persuade purchasers to take out subprime loans with high interest rates from a variety of mortgage lenders. As a result of mortgage steering, however, the subprime lending business came dangerously close to collapsing. Government control of real estate activities has been considerably curtailed, but not fully removed, in recent years, as a result of the near-collapse of the subprime mortgage sector.
Subtle versus Outright Steering
During the twenty-first century, some real estate salespeople and mortgage brokers began pressuring low-income purchasers into taking out loans that they couldn’t pay. The primary purpose of mortgage guiding was to persuade purchasers to take out subprime, high-interest-rate loans from a variety of lending institutions. The unintended consequence of mortgage steering, on the other hand, was the near-collapse of the subprime lending market. Since the near-collapse of the subprime mortgage industry, regulatory monitoring of real estate activities has significantly decreased, but not entirely eliminated, mortgage guiding.
Avoiding Mortgage Steering
Mortgage experts advise customers to exercise extreme care if they receive too much push from their real estate agent to use a certain lender rather than another. Buyers are ultimately responsible for making the selection regarding which mortgage lender to choose. Those purchasing real estate who are feeling pressured by their agents to choose a certain mortgage lender should remind agents that the choice of lender is entirely up to them and not the agent. Property buyers who believe they have been subjected to apparent or even predatory mortgage steering should consult an attorney as well as their local real estate board.
Newsletter – Nuances of Steering and Blockbusting
In this article from March 2016, we discuss the nuanced aspects of steering and blockbusting. CDEICertified Distance Education Instructor Jim Luger contributed to this article. In your current state of knowledge, you should have no trouble identifying flagrant breaches of the Federal Fair Housing Act that are based on discrimination against protected classes. However, two less obvious acts, guiding and blockbusting, may have appeared relatively innocuous to agents or brokers who later found themselves the subject of a fair housing discrimination action.
This type of breach might occur as a result of an apparently well-intentioned assumption.
This is an example of discrimination against Muslims.
For more particular information, such as geographic locations, property types descriptions, and pricing ranges, contact the broker.
Terms such as “safe” and “pleasant” are not detailed enough, and if you read too much into them, you may find yourself steering in a prejudiced manner. As an illustration, consider the following imaginary instances of discriminatory “mind reading” by a real estate licensee.
- A young couple informs their real estate agent, Ruth, that they wish to reside in a townhouse complex among individuals with whom they would get along well. Ruth directs them to townhouse complexes where the majority of the residents are families with children, based on the implications of their remark
- A buyer informs her agent Dick that she wishes to live in a “low crime” neighborhood. Dick believes he understands what she is saying, and he picks particular communities solely on the basis of demographics.
Blockbusting A more egregious form of fair housing violation occurs when real estate agents or brokers drum up business by going to specific neighborhoods and knocking on the doors of homeowners, telling them that they should sell their home and move because someone from a protected class is moving in nearby, or that “those people” are taking over the neighborhood, as opposed to other methods. Homeowners may be persuaded by the licensee to sell before their homes’ prices begin to decline, and they may even be advised to price their homes below market value in order to sell quickly.
Example: A fictitious real estate agent called Sam decides to launch a personal marketing campaign in his marketing region by sending out postcards offering his services as a listing agent to potential clients.
Retired people are increasingly relocating into the region, he observes.
In order to prevent steering and blockbusting infractions, you should examine your operations in light of the state and federal protected classes lists, and you should ask for detailed information when purchasers or renters provide you with ambiguous real estate search requirements.
‘Steering’ in Real Estate (and What to do About it)
This piece is part of a series on the link between racism and homeownership that we are currently running. So you’ve discovered a fantastic real estate agent, a true professional who is well-versed in the region where you wish to purchase a house. They’ve strolled the streets and talked with the people who live there. They may even have children enrolled in the local schools and attend summer block parties in their spare time. However, this does not imply that they are free to share all of their thoughts about a neighborhood with you.
- Fair housing regulations are in place.
- If they fail to comply with these regulations, they may be subject to penalties such as fines and license suspension.
- (Stop right there!
- The most prevalent sort of steering, on the other hand, is racial steering.
- The tactics in which they can accomplish this vary, include recommending people against looking for homes in specific neighborhoods or stating that someone would be “more comfortable” in one community over another.
- The ramifications of racial steering Steering was made unlawful with the passage of the Fair Housing Act in 1968, but its impact continues to this day.
- Because property values in communities dominated by white households increased at a quicker rate than in other neighborhoods, many of these homeowners were able to accumulate more equity and wealth for their children and grandchildren than homeowners of color in other neighborhoods.
- In a nutshell, the history of racial steering in housing in the United States has resulted in some areas being deprived of appropriate housing, educational facilities, and other opportunities for decades.
Here are a few examples of subjects of conversation that might lead to professional steering throughout the homebuying process, as well as suggestions for how to prevent them:
According to Gene Gonzales, a Realtor with Iron Key Real Estate in Fresno, California, real estate brokers are not permitted to profile the “kind” of individuals that live in a certain neighborhood or building. According to him, “we must be careful not to push individuals in any certain path.” “The most I can do is point you in the direction of public resources so that you may make an informed decision based on your own research.” Susanna Haynie, managing broker with theCo Re Group in Colorado Springs, Colorado, believes that buyers must come to their own conclusions.
As Gonzales explains, “An agent cannot know what will make someone feel secure and comfortable or what would make them feel unsafe and uncomfortable.” “Also, you never really know what the person who is asking the question is thinking.
As Gonzales explains, “An agent cannot predict what will make someone feel secure and comfortable, as opposed to unsafe and uncomfortable.” Also, you never know what the person asking the question is thinking until they say it out loud.
- The following is a bibliography on racial injustice in the United States of America: Are you noticing fewer houses for sale? Check out our buying advice for buyers in a competitive market.