In the real estate world, agents listen carefully needs of clients and send any exciting listings. Needs are more important than any preconceived ideas about what they might need.
They are patient and will answer all your questions.
However, this is not the ideal experience for many homebuyers, particularly minorities.
Some real estate agents have directed buyers to specific neighborhoods based on race, religion, or other discriminatory factors. The main reason for widespread segregation in American neighborhoods is steering.
What is Steering in real estate? And how does it work across different communities? We will discuss steering and the laws that surround it. And what you can do if your agent steers you.
What is Steering in Real Estate?
Steering in real estate is when agents make discriminatory remarks about potential buyers and show only properties compatible with their beliefs, race, gender, or other protected characteristics.
For example, you might show a person of one race property only in areas where they are prominent and avoid neighborhoods where they are dominant.
Although it is against the Fair Housing Act, the steering still happens.
The United States has a long history of segregation based on race or ethnicity. One way to achieve segregation goals in the past was to create property covenants, which restricted ownership in certain areas.
Many of these covenants are still being discovered and removed. In some cases, 2021 saw discriminatory property ownership covenants still being identified.
Housing discrimination was made illegal by the Fair Housing Act of 1968. Federal courts have confirmed that steering is a form of discrimination in housing.
Examples of Steering in Real Estate
Let’s take a look at what steering looks like in real life. These are just a few examples of how agents can help their clients steer.
- More listings for white homebuyers than those for minority homebuyers
- If clients desire to live in areas dominated by their race, only show them homes in these neighborhoods.
- Discourage white clients from moving to minority areas for “safety” (or using other euphemistic language like “they have terrible schools; you don’t want there.”
- Notifying white homebuyers of neighborhood safety concerns, such as recent break-ins, but not the minority homebuyers.
- Disparaging minority communities to white clients.
Agents who don’t give equal professional service to clients and make assumptions about buyers of different races without asking for direction are in danger of being steered.
How To Identify Steering in Real Estate
Steering in real estate and other discriminatory acts have long-lasting effects on society and the people subject to them. Discriminatory real estate practices have been shown to cause long-lasting problems such as income disparities, violence, and health problems.
Steering can take many forms, and it doesn’t always have to be done by a real estate agent. It is easy to recognize this discriminatory behavior.
This could range from a refusal to show homes in certain areas to subtle suggestions or statements like:
- “You would be more at home in this neighborhood.” “
- “You won’t like this home. “
- “This is not an excellent area for your (culture/family type, religion). “
- “This is a better area for you. “
If agents fail to show you all the properties that match your criteria, they can steer you. It could indicate that agents are not doing what they should be.
The best realtors will show you all the properties that match your criteria and give you information about the area so you can decide if you like them.
What Are the Impacts of Steering in Real Estate?
Steering can have many impacts on society and a particular population. It restricts housing options and focuses on guiding certain races to areas and neighborhoods that lack sufficient funding for education, law enforcement, or other public services.
This also decreases the number of educational and professional opportunities available to the population being steered. People are often steered to areas with lower educational funding, higher levels of poverty, and fewer opportunities. This can reduce intergenerational upward mobility.
In these communities, peer effects from the existing social structures can negatively impact college attendance and job referrals.
Steering can also harm a person’s overall health. Studies have shown a correlation between pollution and mental or physical development.
These effects, when combined, create a vicious cycle that leaves targeted races poor and unhealthy and offers fewer opportunities.
What Should I Do If I Experience Steering in Real Estate?
The Office of Fair Housing and Equal Opportunity (FHEO), part of the Department of Housing and Urban Development, receives and investigates complaints about housing discrimination. This includes steering. These are the steps required for FHEO:
- You file a complaint.
- HUD assigns one to multiple investigators to your case.
- Investigators might ask for more information, such as a timeline or location.
- HUD allows the accused to respond to the complaint.
- HUD closes its investigation and sends you a copy of HUD’s findings. If applicable, HUD takes legal action against the accused.
FHEO can be used to file a complaint and allow them to investigate further evidence. You can also ask to be let go of your contract with the agent.
Blockbusting refers to the illegal practice of “alerting” homeowners that certain races, religions, or practices are moving into a neighborhood to lower their prices or get them out.
If you feel the partnership is not right for you, your agent might allow you to end your contract. It’s wise to talk to your agent about the neighborhoods you are interested in before signing any contract.
It may be the right time to learn about steering in real estate if you’re a homeowner looking to purchase your first house or sell your home.
This industry is complex, and you will never be able to know everything. Work with a professional real estate agent with years of experience in these areas to avoid being unprepared.