Understanding Steering In Real Estate And Its Implications

Understanding Steering In Real Estate And Its Implications

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The stakes are incredibly high when you embark on the journey to purchase real estate, whether it’s your first home or an addition to your portfolio. For many people, one of the critical decisions they will make is what home or property they will buy and in what area of a city.

Purchasing property is a substantial financial commitment, so having a trustworthy and ethical real estate agent by your side is extremely important. Your agent’s role is to navigate the market, ensuring you get the best possible deal and a property that meets your needs and aspirations. But if your agent does not do this, they are not doing their job and could also be doing what is known as “steering in real estate.”

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What Constitutes Steering In Real Estate?

Steering in real estate refers to the unethical and illegal practice where an agent influences or limits a client’s housing options based on discriminatory factors. This manipulation can be based on race, religion, gender, disability, familial status, or nationality—categories protected under the Fair Housing Act.

Beyond discrimination, steering can manifest more subtly, such as when an agent exclusively shows properties at the higher end of the market.

While investing in a valuable asset might seem encouraging, it’s often motivated by the agent’s desire to earn a higher commission. This restricts the buyer’s options and pressures them into making decisions that might not align with their financial comfort or goals.

The Underlying Bias Of Steering

At its core, steering is driven by bias—overt prejudice or subtler forms of discrimination. An agent might steer clients away from specific neighborhoods based on racial prejudices, suggesting they “belong” in different areas.

This not only denies clients the opportunity to choose where they live based on their preferences and needs but also perpetuates segregation and inequality within communities.

The implications of steering extend beyond individual transactions. It affects the fabric of communities, reinforcing socio-economic divides and limiting diversity. Dating where certain groups should live restricts access to resources, opportunities, and the chance for integrated, harmonious communities.

Why Steering Is Wrong And Illegal

Steering is not merely an ethical violation; it’s a legal one. In the United States, it’s illegal because it contravenes the Fair Housing Act, designed to ensure equal access to housing for all Americans free from discrimination.

Steering undermines the Act’s foundation by perpetuating bias and limiting choices based on prejudice.

A real estate agent’s role should be to serve their clients’ best interests, providing them with various options that meet their desires and needs. Steering, by contrast, serves the agent’s interests or biases, betraying the trust placed in them by clients.

Warning Signs Of Potential Steering By Your Real Estate Agent

When navigating the complex purchasing process, having a real estate agent whose priorities align with your best interests is essential. However, some agents may engage in steering, a practice that undermines your choices and is illegal.

Here are key indicators that your agent might be steering you away from making fully informed decisions:

Targeted Neighborhood Recommendations:

If your agent consistently suggests properties in specific neighborhoods based on your race, it’s a red flag. This assumption restricts your options and may not reflect your preferences or needs.

Misrepresentation Of Crime Rates:

Be cautious if an agent provides misleading information about crime rates in certain areas, possibly to sway your decision about where you should live. This could be based on assumptions about your comfort level or where they believe you “belong.”

Withholding Information On School Systems:

An agent not being transparent about the quality of school systems in different neighborhoods is concerning. Accurate information is crucial for making an informed decision, especially if education is a priority for you or your family.

Assumptions Based On Demographics:

Steering can occur when an agent shows you properties that align with your demographic profile rather than based on your stated preferences, financial situation, or other relevant criteria.

Religious Considerations In Property Showings:

If your agent selects or avoids showing you properties based on religion, this is a form of steering. Your religious beliefs should not influence the range of properties you are shown.

Refusal To Show Requested Properties:

If you express interest in properties in a specific area and your agent refuses to show them or is mysterious, this is a clear sign of steering. Your agent should respect and follow up on your requests, providing access to a broad range of properties that meet your criteria.

If you notice any of these practices, addressing your concerns with your agent directly is essential. If the issue persists, consider reporting the behavior to their agency or a regulatory body and seeking a new agent who respects your rights and works diligently to meet your needs.

Awareness of these signs can help protect you from steering and ensure your property buying experience is based on fairness and respect for your preferences.

To combat steering, both real estate professionals and clients must be vigilant. Clients should know their rights and feel empowered to report any suspected steering cases. For agents, ongoing education on ethical practices and the importance of diversity and inclusion in housing can help prevent steering and foster a more equitable real estate market.

Steering is more than just an unethical practice—it’s a barrier to fair housing and an inclusive society. By recognizing and combating steering, we can work towards a real estate market that genuinely serves everyone, regardless of their background, beliefs, or financial status.

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Guiding Your Real Estate Journey: Understanding Steering and Its Consequences

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Anita Hummel
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