Steering is a form of discrimination whereby a real estate professional influences someone’s housing decision based on their race, religion, or another protected characteristic covered by the 1968 Fair Housing Act.
- 1 What is an example of steering in real estate?
- 2 What is steering in regards to real estate?
- 3 What does it mean when an agent is steering?
- 4 What is steering and blockbusting?
- 5 Is racial steering illegal?
- 6 What is the difference between steering and redlining?
- 7 Why do Realtors steer?
- 8 What does redlining mean in real estate?
- 9 What is a panic peddling?
- 10 What is steering in mortgage lending?
- 11 What is an antitrust violation in real estate?
- 12 What is an example of redlining?
- 13 What does blockbusting mean in real estate?
- 14 What is the best example of blockbusting?
- 15 Steer Clear of “Steering”
- 16 What is Steering in Real Estate?
- 17 What is Steering in Real Estate – How to Avoid It?
- 18 What is racial steering?
- 19 When was racial steering made illegal?
- 20 How does steering happen?
- 21 Study Results
- 22 What’s the solution?
- 23 Understand Best Practices
- 24 What is blockbusting?
- 25 Other Illegal Real Estate Practices
- 26 What Is Steering in Real Estate?
- 27 What Is Steering in Real Estate?
- 28 What Your Real Estate Agent Can’t Talk About
- 29 What Your Agent Should Do Instead
- 30 What to Do if You Have a Biased Real Estate Agent
- 31 Find an Agent You Can Trust
- 32 Real Estate Definition of Steering by Crepedia
- 33 Steering – Discriminatory And Prohibited
- 34 Steering Definition
- 35 Deeper definition
- 36 Steering example
- 37 What Research Tells Us About Steering and Housing Discrimination
- 38 Avoid Fair Housing Act Violation for Steering
- 39 What to Look for in Your Marketing Materials
- 40 How to Respond to Client Questions and Requests
- 41 Newsletter – Nuances of Steering and Blockbusting
- 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 What Is Racial Steering & How Real Estate Agents Can Stop It
- 59 What is Racial Steering?
- 60 When Was Racial Steering Made Illegal?
- 61 How Can Real Estate Agents Stop Racial Steering?
- 62 Ready to Finish Your Continuing Education with The CE Shop?
- 63 Steering
What is an example of steering in real estate?
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.
What is steering in regards to real estate?
Steering refers to the illegal practice of directing a prospective homebuyer to or away from a neighborhood based on the presence or absence of protected classes.
What does it mean when an agent is steering?
“Steering” is the practice of influencing a buyer’s choice of communities based upon one of the protected characteristics under the Fair Housing Act, which are race, color, religion, gender, disability, familial status, or national origin.
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 ).
Is racial steering illegal?
When Was Racial Steering Made Illegal? The Fair Housing Act of 1968 “prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, because of race, color, religion, sex, familial status, national origin, and disability. This includes the act of racial steering.
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.
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 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 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 is steering in mortgage 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.
What is an antitrust violation in real estate?
An antitrust law designates what activities are not authorized for real estate agents. These include: price fixing – agreeing to charge the same commission between brokerages. bid rigging – when auction buyers work together to lower purchase prices, group boycotts – avoiding certain buyers or real estate agents.
What is an example of redlining?
Indeed, in the 1930s the federal government began redlining real estate, marking “risky” neighborhoods for federal mortgage loans on the basis of race. Examples of redlining can be found in a variety of financial services, including not only mortgages but also student loans, credit cards, and insurance.
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 the best example of blockbusting?
Examples of blockbusting include: When real estate agents alert the members of a neighborhood that it is “changing” and that they should sell their property. Making house-by-house telephone calls urging member of a neighborhood that they should sell before their property values decrease.
Steer Clear of “Steering”
In the real estate industry, “steering” refers to the practice of exerting influence over a buyer’s selection of communities based on one of the protected characteristics listed in the Fair Housing Act. These characteristics include race, color, religion, gender, disability, familial status, and national origin. Buyers may be steered away from or towards certain neighborhoods based on their race, ethnicity, or other protected characteristic when real estate agents do not inform them of available properties that meet their criteria or express opinions about communities with the intention of directing buyers away from or towards those neighborhoods.
Despite the fact that steering is prohibited by the Fair Housing Act, a recent study done by the newspaperNewsday revealed that it is nevertheless prevalent in the housing market.
According to the findings of the inquiry, real estate salespeople steered the white tester towards different communities than the minority testers in 24 percent of the cases, indicating that they were directing the white tester.
- Provide clients with listings that are only based on their objective requirements
- When a customer uses ambiguous phrases such as “pleasant,” “good,” or “safe,” ask them a series of neutral questions to define their requirements, such as the property’s qualities and price range. Only objective information regarding communities should be communicated, and consumers should be directed to third-party sources for neighborhood-specific information. Pay attention to your unconscious prejudices and learn to recognize them. Consider the following questions when determining what a customer objectively wants: Why have you deleted some elements if you have
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
Believe it or not, real estate steering is still practiced today, albeit in a more inadvertent fashion. Consider the following scenario: you have a Latin family as a customer. It is your belief that they will be more comfortable in a Latino community that you want to show them residences in that neighborhood. You have no intention of causing damage, yet you are really directing, which is against the law and immoral. It’s an example of directing clients toward a particular location or neighborhood because you were only showing them property in Latin neighborhoods.
There are two, however one is in a mostly Asian neighborhood and your customer is white, while the other is in a predominantly white neighborhood.
This is an example of how to guide them away from a certain place.
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
When it comes to where they wish to reside, ask questions that are relevant to the area. If your client specifies that they want to reside on the “west side,” ask if they have a specific street or neighborhood in mind that they are acquainted with in order to reduce the search. By asking precise questions, you will be able to develop criteria. This will allow you to narrow in on where they actually want to reside and prevent leading them in the wrong direction.
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.
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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.
During interviews with real estate agents, Faber’s white co-author used “purposefully on-the-nose questions,” such as “how does race enter the discourse with clients?” when he questioned them. ” It was the agents who would say, “We don’t do that, it’s against the law.” “After that, he’d say, ‘c’mon,’ and they’d effectively spill the beans at that point,” Faber said. According to one real estate agent who participated in the survey, in particular Brooklyn areas, homeowners “don’t want to sell” to black buyers, and “it’s not really worth it to push” them to sell.
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.
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.
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 avoid real estate steering and keep the transaction legal. 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 neighborhoods. 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.
Find an Agent You Can Trust
The good news is that there are some truly excellent real estate agents out there that are well-versed in (and adhere to) the law and are among the finest in their field. In reality, we are familiar with a large number of them. Simply get in contact with one of our Ramsey Endorsed Local Providers (ELP) real estate professionals to get the process started. These agents are at the top of their fields and have been carefully verified by our staff to ensure that they are trustworthy. We wouldn’t recommend them if we didn’t believe in them.
Find a real estate agent who has Ramsey’s trust!
Since 1992, Ramsey Solutions has been dedicated to assisting people in regaining control over their finances, building wealth, developing their leadership abilities, and improving the quality of their lives via personal development.
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
Residential real estate brokers assist their customers towards properties that they believe will best suit their clients’ interests and requirements as part of their job responsibilities. Biases and prejudices held by the agent, whether consciously or subconsciously, may have an impact on the locations and communities that they believe would be appropriate for their client. Unfortunately, they may “guide” their customers to neighborhoods or locations that they believe are acceptable for their clients based on their ethnic heritage or identify as a member of another minority group, which they believe is inappropriate.
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:
- Race, color, religion, sexual orientation, national origin, disability, and familial status are all factors to consider.
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.
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. Nevertheless, the buyer’s real estate agent is not permitted to assist the buyer in this endeavor.
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.
Mortgage rates in your location should be compared in order to obtain the most favorable conditions for your loan.
What Research Tells Us About Steering and Housing Discrimination
During National Fair Housing Month, we take a moment to reflect on the history of housing discrimination and segregation and how we can move forward. Despite the passage of the Fair Housing Act more than 50 years ago, recent research indicates that housing discrimination continues to exist. Real individuals and families are impacted every day, and REALTORS ®must recommit to examining their own actions and biases in order to ensure that all people have equal access to housing. Housing discrimination can present itself in a variety of ways, some of which are less obvious than others.
- The use of “paired-testing studies” is a frequent method for academics to investigate housing discrimination.
- They go through the process of dealing with a real estate professional to rent or buy a property.
- Once every ten years, the U.S.
- The most recent HUD survey was carried out in 2012.
- A paired-testing research of the for-sale market on Long Island, New York, was conducted by theNewsdaynewspaper between 2016 and 2018; the results were published online.
- It was made up of real estate agents from 12 different Long Island real estate businesses, which accounted for more than half of all sales transactions during the time period under consideration.
- According to the Newsdaystudy, 40 percent of real estate brokers involved in the paired housing deal violated fair housing laws, with steering being the most common method of violation.
- The fact that guiding is unlawful doesn’t stop many real estate salespeople from blatantly restricting buyers’ options by directly or tacitly advising them away from specific neighborhoods, according to a Newsdaystudy conducted in 2012.
- TheNewsdaystudy recorded remarks from real estate agents, which researchers later found to be proof of the coded language used to influence the buyer’s agent.
- “Some of them aren’t as pleasant…
- Studies of housing discrimination, such as theNewsdaystudy, have found that minority house purchasers are provided fewer housing alternatives than White home buyers, and that they are less likely to be allowed to visit a home in person before making a purchase.
directing customers to specific neighborhoods exclusively on the basis of their race or ethnicity restricts their options, enforces segregation, and deepens economic disparities.
- A growing body of research has demonstrated that discriminatory steering results in a disproportionate number of non-white households residing in high poverty areas, and that this is a significant contributor to the disparity in intergenerational mobility between Black and White households. Racially discriminatory lending adds to growing disparities in housing equity by causing properties in predominately minority communities to experience greater price volatility and poorer price appreciation in general. Limiting a family’s choice of neighborhoods through steering can have a substantial influence on the quality of the schools that their children attend, and, as a result, on the overall opportunities and well-being of the children.
However, it is not just the findings of study that demonstrate the consequences. Testers in the Newsdaystudy were similarly taken aback by the disparity in treatment they experienced, given that the real estate salespeople were all courteous and appeared to be working in a professional manner. Several of them were completely unaware that they were being treated differently than their “partner.” As one African American tester put it: “Having the alternatives limited in that way makes me think about what other options are out there that people might not be aware of.” As another African American tester put it: And who is it that is making these decisions?
While overt housing discrimination has decreased in prevalence since the implementation of the Fair Housing Act, implicit discrimination, such as racial steering, continues to be a problem in the housing industry.
In an effort to guarantee that they are not in violation of fair housing rules by limiting potential buyers’ home choices through racial steering, the National Association of Realtors® has provided the following suggestions to REALTORS®:
- Provide clients with listings that are only based on their objective requirements
- When a customer uses ambiguous phrases such as “pleasant,” “good,” or “safe,” ask them a series of neutral questions to define their requirements, such as the property’s qualities and price range. Only objective information regarding areas should be communicated, and consumers should be directed to third-party sources that provide neighborhood-specific information. Learn to become more aware of your own unconscious prejudices. Consider the following questions when determining what a customer objectively wants: Why have you deleted some elements if you have
If you have any comments or questions regarding this item, please email them to Lisa Sturtevant, PhD, Chief Economist for the Virginia REALTORS®.
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.
- Is this a safe neighborhood to live in? Are the schools up to par? In what ways does the educational system reflect diversity?
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?
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.
- 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.
What does Steering mean in real estate? – Kitchen
In the real estate industry, “steering” refers to the practice of exerting influence over a buyer’s choice of communities based on one of the protected characteristics under the Fair Housing Act. These characteristics include race, color, religion, gender, disability, familial status, and national origin.
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?
Families with children under the age of 18; pregnant women; and anybody who is in the process of obtaining legal custody of a minor kid are all considered to be in the family status category (including adoptive or foster parents).
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?
If a buyer’s home options are restricted because of any of the criteria outlined by the Fair Housing Act, this is not just immoral, it is also unlawful since it reduces the number of housing options accessible to that buyer. This would be a violation of the Fair Housing Act as well as the REALTORS® Code of Ethics, respectively.
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.
What Is Racial Steering & How Real Estate Agents Can Stop It
Stopping racial discrimination in real estate begins with real estate agents. The formation of racially segregated communities may be traced all the way back to the founding of the country. Historically distorted zoning regulations from the 1920s and 1930s, as well as urban renewal legislation from the 1940s and 1950s, have contributed to the majority of the nation’s current housing woes. Not until the Civil Rights Movement did we witness a shift in the way we handled community development. While the regulations changed as a result of this new development, the demographics of these communities remained the same despite the changes.
Racial steering, on the other hand, is a fundamental principle behavior that contributes to the problem in a significant way.
What is Racial Steering?
“Racial steering” is described as “the practice of real estate salespeople guiding potential house purchasers towards or away from specific communities based on the race of the home buyer.” It deals with advising or pushing customers towards a certain area, as well as ignoring to offer important information and facts about a house, all due of a client’s ethnic characteristics or history. The elimination of this practice is supported by several laws and Supreme Court judgments, yet it continues to be a systemic problem that affects thousands of real estate transactions each and every year.
Not long ago, our investigative team went undercover in Long Island and uncovered just how prevalent and widespread racial steering is in the Empire State. As a real estate agent, it is your responsibility to halt this behavior and speak out against it, even though laws are in place to prevent it.
When Was Racial Steering Made Illegal?
Among other things, the Fair Housing Act of 1968 “prohibits discrimination in the sale, rental, and financing of residences, as well as in other housing-related transactions, on the basis of race, color, religion, sex, 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.” While the King assassination riots were taking place, President Lyndon B.
Johnson signed this bill into effect, which was critical in expanding government financing and restricting the spread of hate crimes in America.
In this case, racial steering would be included.
How Can Real Estate Agents Stop Racial Steering?
There are several strategies for preventing racial steering in your own and your colleagues’ practices. The first step is to use common sense and conduct in accordance with human dignity. Here are some other ways you may contribute to the elimination of racial discrimination in the real estate industry:
Treat Everyone with Decency and Respect
- When it comes to building a welcoming and fair atmosphere for clients, a basic rule of thumb is to treat everyone with the same respect. We are all human, and we should all be treated with the same rights and respect, regardless of the color of our skin
- We are all equal.
Find Homes Based on Wants and Needs
- Helping a client choose a house means showing them properties that fit their wants and requirements. Visiting houses in communities where individuals of the same ethnicity or skin tone as your customers live does not constitute acting in their best interests
- Instead, you are acting in your own.
Become Educated on the Matter
- Taking classes on racial steering and Fair Housing regulations, whether through our Continuing Educationcurriculum or elsewhere, will help you become more educated about what is appropriate and what isn’t in your community.
Practice What You Preach
- Talk is cheap, but action is more valuable. Only you, as an agent, have the ability to adhere to these ethical rules and provide your customers with the best possible service as their real estate agent. It is important to set an example for your colleagues and future agents by living what you teach.
See Something, Say Something
- In the event that you see or are aware of a fellow colleague participating in racial steering, you have an ethical duty to report their actions. By making a complaint on these hostile behaviors, you may contribute to closing the gap between men and women in the real estate industry.
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In January 1966, Martin Luther King, Jr., chose Chicago for a national campaign against housing bias.
Daley agreed to convene the Conference on Religion and Race.
In Washington, five years ofcivil rightslegislation culminated in the Fair Housing Act of 1968, which made it unlawful to deny to sell or rent a dwelling solely on account of race, and declared neighborhood integration a national goal.In 1975, the Leadership Council, the village ofBellwood,and five residents accused two brokers of steering black home buyers into a racially changing 12-by-13-block area in Bellwood, thereby denying the buyers the benefits of living in an integrated neighborhood, and inducing lower property values and erosion of the tax base.
The district court denied the plaintiffs standing to sue, a decision reversed on appeal.
Village of Bellwood(1979), decided that the village and homeowners in a racially changing area have standing to challenge steering practices as indirect victims of housing bias.The Leadership Council had been denied standing to sue inBellwood.Testing remedies were expanded inHavens Realty Corp.
Coleman(1982), in which the Supreme Court said that housing groups and black testers (people who pose as buyers, both black and white, to monitor practices) given false information may sue.
The following year, the South Suburban Housing Center and nine South Cook County suburbs sued the South Suburban Board of Realtors.In addition to antisteering suits, suburbs facing racial change have also used techniques of benign steering and managed integration.
The National Association of Realtors countersued the plaintiffs in the South Suburban Center suit of 1984, charging their managed integration techniques violated the Fair Housing Act.
“Housing Discrimination in the Chicago Metropolitan Area.”De Paul Law Review32.2 (1985): 492–513.Goodwin, Carole.The Oak Park Strategy: Community Control of Racial Change.1979.
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