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As Realtors, we should all be familiar with the terms redlining, steering and blockbusting. After all, the Fair Housing Act passed 55 years ago this year and technically prohibited housing discrimination on the basis of race, religion, national origin, sex, disability and familial status.
Yet, in 2023, discrimination still abounds throughout the housing industry. It may be harder to recognize discrimination in this day and age. After all, we no longer have homeowner association covenants restricted by race.
Instead, Realtors may determine in advance how much time to spend with clients, or which services to provide, based on a number of factors. In some cases, the factors can include protected classes such as country of origin.
However, in other cases, Realtors (and associated professionals like loan officers) make these determinations based on other factors such as perceived commission value.
Consider these stories:
- A non-traditional buyer with a service job and an ITIN meets with a lender to get pre-approved. After spending five minutes in discussion, and without reviewing credit or documents, the lender tells the buyer that they, at most, would be qualified for a purchase price of $135,000. Upon visiting with a second lender, who spends an hour and asks the appropriate questions as to income, time in current position, etc., the second lender runs credit checks, reviews documents and pre-approves the buyer for a purchase price of $195,000.
- A Realtor is working with a buyer whose primary language is not English. The Realtor is working with the buyer to prepare an offer and insists upon having the buyer sign without taking the time to explain the full ramifications of the offer. Later, the buyer is surprised to find that there are specific timelines regarding earnest money, inspections, etc.
- An experienced Realtor who typically lists homes that are at the median price point or above in the market receives a listing for a home under the median price point. Most of this Realtor’s listings are beautifully staged, photographed and promoted. The lower-priced listing, however, is simply put on the multiple listing service without the additional preparation. And, in fact, the Realtor has never mentioned the potential for additional preparation and marketing to the seller. The lower priced home also sells for above list price but below the other comparables in the area.
- A Realtor is told by the buyer that they want an LGBTQ-friendly location for their home. Instead of discussing steering with the client, the Realtor only takes the buyer to those areas that they perceive as “LGBTQ-friendly.”
- Two different buyers call the same Realtor and ask to see a home. The Realtor runs a background check through Forewarn for the first buyer, who is male, and not for the second buyer, who is female.
How do we address these issues? Realtors should have a system and checklist for every transaction.
Some examples of policies that could be standardized, despite any other factors:
- Requesting pre-approval or proof of funds before showings
- Requiring a buyer consultation before showings
- Running background checks (through Forewarn or similar systems) for all unknown potential clients
- Providing a standard list of services for all listings and partnering with the sellers to understand the services
- Reviewing paperwork with all clients, even if it requires translation services
Safe, affordable housing should be accessible for everyone. As Realtors, our responsibility is to our clients, no matter who they are.
I personally have seen each of the stories above in the past two years, and each one breaks my heart. When we don’t take the time to get to know our clients or serve our clients well, we hurt their ability to buy the right home or sell for enough to meet their future goals. We can, and must, do better.
After spending years in corporate America, Nora Crosthwaite decided to become a residential realtor on a whim in 2015, serving the Des Moines, Iowa area. She built a small team, incorporating systems throughout, and now owns Home Sweet Des Moines, brokered by Realty ONE Group Impact. She is currently the chair of the Iowa Association of Realtors Diversity Committee and focuses any extra time on affordable housing initiatives in the Des Moines area. Connect with her on Threads and Linkedin.
