This article last updated Feb. 22, 2022.
Whether you’re a new or experienced agent, you’ve probably sat through many hours of Fair Housing education as part of your licensure and renewal processes.
Nevertheless, a three-year study by Newsday revealed widespread Fair Housing Act violations by Long Island real estate agents despite the state’s required fair housing training.
What’s behind the discrimination?
Imagine that your favorite client has just referred their two closest friends to you. When you’re showing them property, you spot an open house. The tech CEO who owns the property is dashing off to the airport as you walk in to look at the property.
The house turns out to be perfect for your clients. Unfortunately, there’s another couple looking at the house. You overhear them telling the listing agent they will be writing an all-cash offer because their company just went public.
Now picture what each of these individuals looks like — your favorite client who made the referral, each of the four buyers, the tech CEO, and the listing agent. Do you have a clear picture in your mind of each individual?
Now answer these questions:
- Was the tech CEO a woman?
- Were the buyers whose company had just gone public baby boomers?
- Were the two buyers in each case a married man and woman?
- Were any of the other buyers African American or Hispanic?
- How similar were the listing agent and your favorite client to you in terms of age, appearance, gender, values or other factors?
Now repeat this exercise. Chances are you will imagine a more diverse group of people the second time around.
This exercise demonstrates how unconscious bias works. We’re more comfortable around people who are like us. As the law of attraction states, like attracts like.
Consequently, one of the first steps of raising the bar in fair housing is to make people aware of where unconscious bias creeps into their real estate practices.
The Newsday study
Newsday sent white, African American, Asian and Hispanic testers to uncover if real estate agents would treat them differently.
Here’s what they found:
- Black testers experienced disparate treatment 49 percent of the time compared with 39 percent for Hispanics and 19 percent for Asian testers.
- One agent asked a minority tester to obtain a pre-approval for their mortgage loan prior to showing a property. The same agent asked the white testers, “When can you start looking?” without asking for pre-approval.
- Unlawful steering: When describing a 79 percent minority area where there have been MS-13 gang murders, one agent told a Black customer, “Every time I get a new listing in Brentwood, or a new client, I get so excited because they’re the nicest people.”
The same agent told a white customer to “research the gang related events in the area for safety.”
- White testers received 50 percent more listings to choose from than their Black counterparts (39 v. 26).
- Agents gave Black customers their smallest share of listings in towns with the highest proportions of white residents and their largest share where whites were less prevalent.
The question for you is: Are you falling short on fair housing compliance and not realizing it? To avoid fair housing violations that may be coming from unconscious bias on your part, ask yourself each of the questions below. Then follow the best practices to make sure you are in compliance with the Fair Housing Act.
1. Do you always follow the same process with every buyer?
Get in the habit of using a written buyer interview where you ask every buyer the same questions. As part of that interview, always ask every buyer to be pre-approved or pre-qualified as one of those questions. If you refer them to a mortgage lender, always give them at least three from which to choose.
2. During your buyer interview, do you ask about family status (‘How many people in your family?’)
Asking how many people are in your family violates fair housing law. Instead, ask “How many people are in your household?”
3. How do you greet a new client who comes into your office — do you offer them coffee or some other type of refreshment?
A number of years ago, a large independent company had an agent who offered a cup of coffee to some white testers. A different agent at the same company did not offer coffee to their Black testers. The result: a $200,000 lawsuit against the brokerage for violating the fair housing laws.
Here’s what is fascinating: The agent who offered the white testers coffee was a heavy coffee drinker. The other agent who didn’t offer coffee was not. The bottom line: Not only do agents need to be consistent, so do their brokerages. If one person is offered coffee or water, then every person must be offered coffee or water.
4. Have you ever used any of these words in your advertising or marketing?
These catchwords can convey preferences for one group over another group or send signals about a community’s makeup. To avoid this issue, instead of using a phrase such as “great for joggers,” describe the features of the property: “Near a 6-mile paved exercise trail through the woods.”
According to the Fair Housing Institute, phrases such as “master bedroom,” “desirable neighborhood,” “walk-in closets,” “no pets,” or “walk to bus stop” are acceptable. “Walk to temple” is not acceptable. Neither is “No children” unless the community is a 55+ age-restricted community.
5. What images do you use in your marketing?
For example, if you show the workout room in a condominium complex and all the people in the picture are white, fit millennials, you have violated fair housing laws.
Make sure that any photos or videos are age and ethnically diverse.
6. Do you follow up with every online, sign call or open house lead?
This is an area where unconscious bias can be a difficult challenge. Are your follow-up techniques more aggressive with some types of client leads? If you’re not following up with every lead, how are you making that decision?
An excellent way to avoid having fair housing issues with your lead follow-up is to use an automated lead follow-up process that contacts all leads that you receive. For example, if you’re holding an open house, Spacio automates your lead follow-up process.
7. Do you ever describe your clients by their age, ethnicity, family status or religious preference?
Have you ever told another agent or seller something like this? “I represent a lovely, young couple who are pregnant with their first child” or “My clients are Chinese and their parents who live with them don’t speak English.”
Again, avoid references to age, family status, country of origin and ethnicity.
8. What to do if your client’s behavior violates fair housing laws?
If a seller has multiple offers on their property and they want to know the age, ethnicity, sexual orientation, or any other factor that violates fair housing law, advise them that as per the law, you cannot answer the question.
If any client asks you to engage in any behavior that violates the law after you have explained the fair housing requirements to them, it’s time to terminate your relationship.
The key point to keep in mind is that each client must receive the same level of service — that is, the very best that you and your company can provide.
- Everything real estate professionals need to know about the Fair Housing Act
- Fair Housing Institute’s fair housing advertising guidelines
- Until the 1970s women could not purchase a home or get a loan without either their father’s or their husband’s signature. Learn how one California female broker led the charge to break this discriminatory practice.
- Redlining is alive and well — how lenders today continue to discriminate against minorities.
- 15 ways your property descriptions could violate fair housing
- Avoid fair housing violations: How to respond to sticky FAQs
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.