If I owned a dress shop and a tiny woman walked in, I’d probably take her straight to the petite aisle. If I ran a restaurant and a gentleman entered with a lit cigarette dangling from his mouth, I would immediately offer him a table in the smoking section.
Unfortunately, such common-sense ideas don’t always apply to the real estate business.
When a restaurateur suggests a chain-smoking customer might feel most comfortable in the smoking section, it’s considered good customer service.
But when a real estate agent suggests a home buyer might be more comfortable in one particular neighborhood than another, it’s illegal steering–a federal crime that can result in huge fines, possible loss of the agent’s sales license and even a prison term.
I’ve been thinking about anti-steering laws for the past few weeks because an agent I know was recently punished for a questionable steering violation.
His crime: Suggesting to a gay couple that they “might feel more comfortable” if they focused their home-buying effort in a high-class part of town that’s widely known for its gay population.
The agent thought he was providing the couple with the local expertise most people want when they choose a real estate agent to help them purchase a home.
The gay couple, however, thought the agent’s comment constituted steering and they reported him to the local board of Realtors and the state’s licensing department.
The Realtors group checked into the gay couple’s complaint, and decided that no disciplinary action against the agent was warranted.
State regulators decided differently. They sent my agent friend a letter that stated that his license was “subject to permanent revocation” under both state and federal anti-steering laws if he didn’t respond to the allegations within 60 days.
Beyond threatening to take away his sales license–and therefore his livelihood, the letter from the state also noted he could be fined several thousand dollars and could even go to jail.
So much for that innocent-until-proven-guilty stuff Prof. Baker, my all-time favorite teacher, taught me in 11th grade civics class.
My agent friend paid $7,500 retainer to a lawyer who wrote a letter to the real estate commissioner.
After some negotiation, my friend agreed to accept a 90-day “restriction” on his license: He can keep selling homes, but he also must attend what he calls “gay-awareness” classes.
The disciplinary action will stay on his record forever.
Ironically, the agent I’m writing about is also gay. I didn’t mention that earlier because it didn’t seem relevant.
Likewise, my agent friend never mentioned it to the gay clients because he didn’t feel it was important. I earnestly believe he thought he was simply being helpful when he suggested they might prefer living in one particular community rather than another.
What bothers me most, though, is that the attorney said my friend’s comments probably wouldn’t have landed him in trouble if he had told the buyers he is gay, too. If he had, the lawyer advised, his suggestion that the couple might be more comfortable in one part of town rather than another could have been viewed as knowledgeable market insight, not illegal steering.
Maybe the lawyer was right. But should agents really be expected to disclose their sexual orientation to their clients in an effort to avoid misunderstandings or even legal action?
And if an agent feels it’s necessary to disclose his or her private preferences to every client, where are we going to draw the line? Should the agent be required to disclose his religious beliefs, so he won’t get into trouble if he mentions that a particular neighborhood is served by several churches or synagogues?
Prof. Baker died a long time ago. But trust me, he would have had a field day with this one.
“It’s a very slippery slope,” he used to say, “but for better or worse, we’re all on this trail together.”
Got tips, ideas or advice for the Rookie Realtor? Send them to Rookie@inman.com.
