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As a real estate expert who works with homebuyers and sellers day in and day out, you may have innocently advised a client using the phrase, “If you were my daughter, I would suggest you look at _____ [fill in the blank] neighborhood(s).”
Harmless, right?
Not necessarily. If working in the real estate field were similar to various sports, I could see a referee immediately stepping in between you and your client saying “flag on the play” as soon as you’ve finished uttering those words.
Why?
There is an elephant in the room. That elephant is the looming threat of being canceled over a social media post, over what you thought was an innocent comment that was captured on a Ring doorbell camera or the like.
It’s time to get the elephant out of the room by doing this quick self-assessment as to whether or not your (or your agent’s) business is a walking red flag. The good thing is that nobody has to know your responses and you can make adjustments now before getting into hot water (not simply with an imaginary referee but) with your local and/or federal laws.
As an added bonus, if fair housing courses become a requirement to renew our Realtor status every cycle, that becomes another opportunity to make adjustments without the stress of being penalized.
Red flag quiz: Have you done any of these?
Red flags to watch out for in your real estate dealings include:
1. Taking clients only to certain neighborhoods where you believe they will ‘fit in’ instead of where they have asked you to tour
More than one-third of those surveyed —including white, Hispanic/Latino/Latinx, Asian/Pacific Islander, and Black, not just people of color — in the 2021 Profile of Home Buyers and Sellers by the National Association of Realtors believe that had witnessed or experienced steering towards or away from particular neighborhoods.
The only acceptable reason to not take a client to a neighborhood they have asked to see is if it does not fit their budget, which we should explicitly state and have a paper trail to protect ourselves if there ever are allegations of unfair housing. Anything else may be interpreted as steering.
2. Giving advice based on your own preferences such as, ‘If you were my daughter/son/niece/sister (or any other familial relationship), I would (not) want you to live here’
This may be interpreted as steering unless you give an explicit reason (please have a paper trail) that is tied to the property and not people.
For example: “The flood damage in the neighborhood has not been adequately repaired and impacts appreciation.” We should give statements of fact about the property, never the people.
3. Referencing only certain parts of a community/subdivision/complex/building for those like the client (especially if it refers to a protected class such as how many children they have, their gender, etc.)
This is another example of illegal steering.
4. Being willing and excited to work with a prospect over the phone or via email/direct message but reassigning them to another agent (or outright ignoring/ghosting them) after meeting them in person
Never ghost a prospect because they may be able to make the case that it was due to being part of a lawfully protected class.
There are numerous, valid reasons as to why you may not be able to work with a client at this time and need to refer them. For example, perhaps you are struck with a sudden, verifiable illness or have documented travel plans that conflict with the prospect’s availability. As a courtesy, and to not be a walking red flag, explain it and follow up in writing.
5. Not being willing to market a listing with the same deliverables or on the same platforms where you market your other properties
It’s one thing if you have a pre-printed menu of services that distinguishes the type of marketing based on what package the seller chooses. It’s another thing (that looks like un-fair housing) when you “on the fly” deem you will not invest certain marketing resources in a particular listing.
In short, pre-plan your different listing packages (which may be at different price points), giving the option to the potential client to select instead of you picking and choosing in a way that may be deemed discriminatory. Offering the same services to everyone is critical to not being a walking red flag.
6. Saying you do not serve a particular neighborhood even though it’s similar to and nearer than other neighborhoods you normally promote
It’s one thing if you specialize in horse farms and this is a condo. But it’s another thing if you consider this the “bad” part of town. We know that such selectivity has cost some real estate firms millions.
7. Asking clients to hide any part of their identity (such as sexual orientation, religious affiliation, nationality, how many children they have, race, etc.), especially if they are part of a protected class
It is one thing if we are working with actual fair housing testers, but it is dehumanizing to ask clients to generally hide parts of themselves at the start of a real estate transaction.
It’s also one thing to have a home staged for a prospective buyer, but we should never have to stage who lives in the home for an appraiser.
For instance, I do not encourage families to hide who they are (e.g. removing family photos, religious symbols, etc.) when an appraiser is scheduled. Instead, if our “spidey senses” are tingling because the valuation results seem to have been lowballed comparatively or impacted by one’s protected class, then we as real estate pros best help our clients by helping them to report it.
It’s less dehumanizing and, if there is an instance of un-fair housing, this particular instance will be documented (since housing discrimination is underreported, which allows it to fester). The specific violator can be identified, asked for restitution and, ideally, can learn to improve their practices for the betterment of our communities.
8. Not targeting communities least likely to apply
Targeting communities least likely to apply is a must for “properties subject to affirmative marketing requirements” but as Fair Housing Decoders (what I call fair housing advocates), we can go the extra mile to reach more of our communities by pursuing those that are the least likely to apply in addition to our normal marketing challenges.
9. Partnering with vendors who are fair housing offenders (e.g. banks that are notorious for alleged unfair lending)
There is currently an initiative snowballing that says lenders may be on the hook for appraisers who discriminate. For the sake of this article’s topic, we will not get into the nuances of that but I have been asking all Fair Housing Decoders in the continuing education course I teach on fair housing advocacy to hold their vendor partners accountable for fair housing/lending.
That may mean eventually dropping these vendor partners if they are opposed to treating everyone in our community fairly in the home buying/selling/leasing process. I like the onus being voluntarily on us, but it looks like policies/laws may eventually force our hand. There is no time like today to cultivate this practice.
Do you see a theme in not being a red flag?
It is to communicate as much as possible as early as possible with a paper trail. Thus, a lack of communication is often our biggest red flag that may cause us to deal with the headache of an investigation and/or penalty that could have been avoided by being more proactive in our communication, that again should always have a paper trail.
Coach’s call: I want to challenge you that if you are a night person, at the end of each day, follow up conversations in writing (email, text, DM, or even fax, if that floats your boat) to clarify and make sure all parties are on the same page. If you are a morning person, do it at the start of your day. If you are neither, then be sure to still schedule it daily, while your memory is fresh. This habit will save you in the long run.
As a former managing broker of a “big box” realty firm (I partly got a law degree to better navigate such legal issues as a managing broker), it never failed that the agents who were thorough in communicating via a paper trail were able to avoid fines and penalties. Most times they walked away with a pat on the back for being so detailed, whereas those who simply relied on the selective memory of a conversation often had to face penalties, including fines and/or a loss of their license.
You may even know some in our industry that faced jail time depending on the severity of the infraction.
As real estate experts, we should be our community’s resource for impartial data about the property, not about the people (nor our opinions of those people). Thus, if any part of your real estate dealings describes the people, please know your business is likely a walking red flag.
Lee Davenport is a licensed real estate broker, trainer and coach. Follow her on YouTube or visit her website.
