Steering Real Estate: A Comprehensive Guide 2023

Picture this: You’re on the hunt for your dream home, excited about the possibilities. But as you discuss your needs with a real estate agent, you can’t shake the feeling that something isn’t right.

Are you being treated fairly, or is bias influencing the guidance you receive? This is the reality for many individuals facing real estate steering. This illegal practice occurs when agents influence clients based on protected characteristics like race or religion.

In this article, we’ll explain the world of real estate steering, explaining why it’s illegal and how it can impact buyers and sellers.

What is Real Estate Steering, and Why is it Illegal?

Real estate steering, a practice prohibited by the Fair Housing Act, involves real estate agents influencing clients’ decisions based on protected characteristics such as race, religion, gender, disability, familial status, or nationality. This biased guidance can lead to unequal treatment and discriminatory outcomes in the housing market.

According to a U.S. Department of Housing and Urban Development (HUD) study, steering complaints constituted all fair housing complaints received in recent years.

This alarming statistic highlights the prevalence of steering and the need for increased awareness and enforcement of fair housing laws.

Real estate agent steering is illegal because it undermines the principles of equal housing opportunities and perpetuates systemic discrimination.

The Fair Housing Act ensures that all individuals can make housing decisions without facing bias or discrimination based on protected characteristics. The law seeks to create a fair and inclusive housing market for everyone by prohibiting steering.

Types of Steering Real Estate

Real estate steering encompasses a range of practices where little influence is exerted by real estate agents, resulting in unequal treatment for buyers or sellers. By understanding specific types of steering, we can better recognize these behaviors and take action against them.

1. Neighborhood Steering

An agent can guide clients toward or away from specific neighborhoods based on their assumptions about the client’s race, religion, or ethnicity. For instance, steering a client away from predominantly minority communities or encouraging them to only consider specific areas based on their background.

2. School District Steering

Agents can direct clients to particular school districts based on assumptions about their family status, such as steering families with children towards districts with better-rated schools while neglecting to provide equal information about other areas.

3. Availability Steering

Depending on clients’ protected characteristics, agents might limit access to certain property listings. They can show or discuss properties that align with their biased perceptions of the client’s preferences, thereby restricting their choices.

4. Price Steering

Agents can assume a client’s budget or financial capabilities based on their protected characteristics. This can lead to steering clients toward overpriced or underwhelming properties compared to their actual preferences and financial capabilities.

5. Discouragement Steering

Agents may subtly discourage clients from pursuing certain properties or areas by emphasizing negative aspects, exaggerating potential drawbacks, or downplaying positive attributes. This discouragement may stem from discriminatory assumptions about the client’s preferences or background.

It’s important to note that these examples of real estate steering are not exhaustive, but they provide insights into the various ways bias can influence decision-making within the industry.

Recognizing these practices is crucial in identifying potential steering situations and addressing them appropriately.

Understanding the Law: Fair Housing Act and Steering

The Fair Housing Act serves as a vital safeguard against discrimination in the housing market, including the illegal practice of real estate steering. By comprehending the provisions of this important legislation, individuals can better protect their rights and ensure fair treatment when buying or selling property.

Enacted in 1968, the Fair Housing Act prohibits discrimination based on protected characteristics, including race, religion, gender, disability, familial status, and nationality.

It applies to various aspects of the housing industry, including real estate transactions, rentals, financing, and advertising.

Specifically addressing steering, the Fair Housing Act makes it unlawful for real estate agents to guide clients’ decisions based on protected characteristics.

This means that agents cannot influence or manipulate clients’ choices regarding neighborhoods, schools, or properties in a discriminatory manner.

Instead, they are obligated to provide equal service and unbiased guidance to all clients, treating each individual with respect and without prejudice.

By upholding the principles of the Fair Housing Act, real estate professionals contribute to creating a fair and inclusive housing market that promotes equal opportunities for all.

It is essential for both consumers and industry practitioners to be aware of the law’s provisions, understands their rights, and take appropriate action if they suspect any violation of fair housing regulations, including real estate steering.

What Your Real Estate Agent Can’t Talk About

When working with a real estate agent, it’s crucial to understand the topics they are prohibited from discussing due to fair housing regulations. These guidelines are in place to ensure equal and unbiased treatment for all clients. Here are some important points to keep in mind:

• Race, Religion, and Ethnicity

Your agent cannot make assumptions or engage in discussions about these characteristics or steer you towards or away from certain neighborhoods based on them.

• Gender and Family Status

Your agent cannot ask questions about your marital status or plans for having children or make decisions based on your family status.

• Disability

Your agent cannot inquire about or use your disability as a basis for steering decisions or suggest properties that may not accommodate your needs.

• Nationality and Immigration Status

Your agent cannot discriminate based on your nationality or immigration status, nor can they ask for proof of citizenship or immigration documents.

• Sexual Orientation and Gender Identity

Your agent cannot discriminate against or treat you differently based on your sexual orientation or gender identity.

Remember, these guidelines aim to ensure fair and equal treatment for all clients. Your agent’s role is to provide you with accurate information, guide you through the process, and help you make informed decisions based on your preferences and needs.

If you encounter any discussions or behavior that seem discriminatory or biased, it’s essential to address the issue and seek a resolution. Not every agent does this, but it is very common among the several people doing jobs in real estate.

Addressing Bias in Real Estate Transactions

It is crucial to address bias in transactions to foster a fair and inclusive real estate industry. Real estate professionals can actively confront bias and ensure equal treatment and opportunities for all clients. Here are important strategies to consider:

Self-Reflection and Education

Reflect on personal biases and engage in ongoing self-education.
Increase cultural competence to better serve a diverse clientele.

Equal Access and Transparency

Provide all clients with equitable access to information and resources.
Avoid making assumptions or excluding clients based on bias.

Open and Inclusive Communication

Use inclusive language and actively listen to clients’ needs.
Foster an environment of open dialogue and understanding.

Diverse Networking and Partnerships

Build relationships with professionals and communities from diverse backgrounds.
Embrace diversity in your network to gain varied perspectives.

Ongoing Training and Development

Embrace diversity in your network to gain varied perspectives.
Participate in training programs that address bias and cultural competence.

Accountability and Feedback

Hold yourself accountable for your actions and seek feedback.
Address concerns promptly and continuously improve practices.

By implementing these strategies, real estate professionals can create an environment that values diversity, promotes fairness, and eliminates transaction bias. Taking proactive steps to address bias contributes to a more inclusive and equitable industry for everyone involved.

Consequences of Steering on Minority Communities

Real estate steering has significant consequences, particularly for minority communities. By guiding clients based on bias, agents contribute to housing disparities and perpetuate systemic inequalities. Here are some key points to consider:

• Steering can lead to segregated neighborhoods, where minority communities face limited access to quality housing and resources.
• Discriminatory practices hinder minority individuals from exploring diverse neighborhoods and limit their opportunities for upward mobility.
• Housing disparities and segregation can negatively impact the economic prospects of minority communities, resulting in decreased wealth accumulation and limited investment opportunities.
• Steering based on school districts can restrict access to quality education for minority families, further perpetuating educational inequalities.
• Experiencing bias and discrimination in housing can have long-lasting psychological effects on individuals and communities, leading to feelings of marginalization and diminished well-being.

Addressing steering is crucial for breaking down these barriers and promoting fair housing opportunities for all individuals, regardless of their background or protected characteristics.

What to Do if You Think You’re Being Steered

If you suspect you’re being subjected to real estate steering, taking appropriate action to protect your rights and ensure fair treatment is important. Here are steps to consider:

• Keep a record of any interactions, conversations, or observations that suggest steering is taking place. Include dates, times, and specific details.
• Consult with another real estate professional or legal expert experienced in fair housing laws to assess the situation and discuss your rights and options.
• If you believe you have experienced steering, file a complaint with the appropriate authority, such as a local fair housing organization or the HUD.
• Depending on the severity of the situation, you may consider engaging in mediation or pursuing legal action to seek a resolution and hold those responsible accountable for their actions.

Remember, taking action against steering is essential not only for your own protection but also to help create a more equitable housing market for others facing similar challenges.

Alternative Approaches for Real Estate Agents

Real estate agents play a vital role in guiding clients through the complex process of buying or selling a property. Here are some strategies for real estate agents to consider:

Treat Every Client Equally

Provide the same level of service, attention, and respect to all clients, regardless of their protected characteristics. Avoid making assumptions or judgments based on personal biases.

Individualize the Experience

Take the time to understand each client’s unique preferences, needs, and goals. Tailor your guidance and property recommendations accordingly, ensuring they align with the client’s specific requirements rather than stereotypical assumptions.

Promote Equal Access

Offer equal access to property listings and information to all clients. Avoid selectively showing or discussing properties based on partial assumptions about their preferences or background.

Educate Clients

Help clients understand fair housing laws and their rights as buyers or sellers. Provide information about their diverse options and encourage them to explore different neighborhoods and communities.

Stay Informed

Continuously educate yourself on fair housing practices, evolving laws, and regulations. Stay updated on cultural trends, local demographics, and market dynamics to better serve diverse clients and avoid unintentional steering.

Foster an Inclusive Network

Build relationships with diverse professionals, including lenders, inspectors, and contractors, who share the commitment to fair housing principles. Collaborate with them to ensure equal treatment throughout the real estate transaction process.

Advocate for Fair Housing

Actively promote fair housing principles within the real estate industry. Encourage fellow agents and colleagues to embrace fair practices and address any instances of potential discrimination or steering.

Real estate agents can create a more inclusive and equitable experience for all clients by implementing these alternative approaches. Remember, fair housing is not just a legal obligation but a moral imperative that contributes to building stronger and more cohesive communities.

Steering Example

To better understand how steering can manifest, consider the following scenario:

A prospective buyer, John, approaches a real estate agent seeking assistance in finding a home. The agent, influenced by unconscious biases, assumes that John, based on his race, would be more interested in specific neighborhoods with a higher concentration of individuals from his racial background.

Consequently, the agent primarily shows John properties in those neighborhoods, limiting his options and potentially perpetuating segregation.

This example illustrates how steering can occur when an agent’s biased assumptions about a client’s preferences lead to unequal treatment and restricted housing choices. Recognizing such instances is crucial to addressing steering and promoting fair housing practices.

Final Thoughts

Real estate steering poses significant challenges to fair housing and equal opportunities within the housing market. By understanding the implications of steering, recognizing the signs, and taking proactive steps to address bias, we can work towards a more inclusive and equitable real estate industry.

Real estate professionals are responsible for ensuring equal treatment for all clients, regardless of their protected characteristics.

By fostering awareness, embracing diversity, and upholding fair housing laws, we can collectively contribute to a housing market that promotes fairness, eliminates bias, and provides equal opportunities for everyone.

Together, we can create a more inclusive and just society through our actions in the realm of real estate.