Steering In Real Estate: Illegal And Unethical

Steering definition real estate refers to a practice in which real estate professionals guide buyers or sellers towards certain properties, neighborhoods, or service providers based on factors such as race, religion, or ethnicity. This practice is illegal and violates fair housing laws, which prohibit discrimination in the housing market. Real estate agents, brokers, mortgage lenders, and appraisers play a critical role in preventing steering by adhering to ethical guidelines and promoting fair housing practices.

Steering Definition in Real Estate

The term “steering” in real estate refers to the unethical practice of directing buyers or sellers to or away from certain properties or areas based on factors like race, color, religion, national origin, sex, familial status, or disability.

Elements of Steering

  • Intent: Intentionally guiding clients based on protected characteristics.
  • Discriminatory Actions: Directing towards or away from specific properties, neighborhoods, or services.
  • Purpose: To limit access to housing opportunities or maintain residential segregation.

Forms of Steering

  • Direct: Explicitly telling clients about limitations or advantages based on protected characteristics.
  • Indirect: Subtly influencing clients through coded language, omission of information, or biased marketing materials.
  • Structural: Policies or practices that create barriers to housing access based on protected characteristics.

Legal Consequences

Steering is a form of housing discrimination prohibited by the Fair Housing Act (FHA) and other federal and state laws. Violations can result in:

  • Lawsuits
  • Fines
  • Jail time

Consequences for Clients

Steering limits housing options and:

  • Increases housing costs
  • Perpetuates residential segregation
  • Denies equal access to housing amenities

Reporting Steering

Individuals who believe they have been victims of steering should:

  • Document the incident
  • Report to the U.S. Department of Housing and Urban Development (HUD) or local fair housing agencies

Preventing Steering

  • Educating real estate professionals about fair housing laws
  • Encouraging the use of unbiased marketing and outreach materials
  • Supporting fair housing programs and initiatives
  • Promoting diversity and inclusion in the real estate industry

Table: Examples of Steering

Type Description Example
Direct Telling a client that a particular neighborhood is not suitable for their race “I wouldn’t recommend looking in that neighborhood. It’s not a good fit for your family.”
Indirect Using coded language to imply that a property is not available “That house has already been sold.”
Structural Zoning laws that restrict affordable housing development in certain areas Prohibiting multi-family housing in single-family neighborhoods

Question 1:

What is the meaning of the term “steering” in real estate?

Answer:

Steering in real estate involves intentionally directing a homebuyer or renter towards specific properties and mortgage lenders based on racial or other discriminatory factors, even when more suitable options exist.

Question 2:

What are the key characteristics of steering in real estate?

Answer:

Steering practices involve:

  • Subtly or overtly discouraging individuals from seeking properties in certain neighborhoods.
  • Providing biased information about properties based on protected class status.
  • Referring individuals to lenders who may offer less favorable terms because of their race or other protected characteristics.

Question 3:

What are the consequences of steering in real estate?

Answer:

Steering practices:

  • Limit housing choices for protected classes.
  • Perpetuate racial and economic segregation.
  • Violate fair housing laws, resulting in legal action and penalties.

Well, that about sums up the basics of steering definition in real estate. I hope you found this article helpful. If you have any further questions, feel free to reach out to the experts or do some more research. Thanks for sticking with me until the end, and I hope you’ll come back for more real estate insights in the future. Until next time, happy home hunting!

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