As a real estate agent, you get the privilege of helping people find their dream homes. With that privilege comes the responsibility to know and abide by fair housing laws. But what are they and how do you follow them? Here's all you need to know.
What Is the Fair Housing Act?
The Fair Housing Act is a federal law that was passed in April of 1968. Its purpose is to prevent discrimination when people are trying to buy or rent a home, get a mortgage, find housing assistance, or engage is in other activities related to housing. The act prohibits discrimination based on seven factors which include a person's:
Many states also have laws on fair housing, so it's important for real estate agents to know their state laws as well. Examples of discrimination include refusing to rent or sell a home, setting different terms, or using different qualification criteria based on any of the factors above.
How Does the Fair Housing Act Impact Real Estate Agents?
As a real estate agent, you are required to abide by the Fair Housing Act in all of your real estate activities.
"Fair housing is just another way to say, treat every one of your customers and clients the same," said Dawn Pfaff, President and Founder of My State MLS, who has over 20 years of experience in real estate. "Where agents go wrong is when they make assumptions about people and their preferences. Those assumptions may inadvertently violate fair housing."
It's about having systems in place and following the same practices to help every client find the best home, regardless of the seven factors. If you violate the Fair Housing Act at any time, you could face an investigation. If found guilty, you may have to pay penalties and could lose your license.
"The best salesperson listens more than they talk," Pfaff continued. "When you meet with a client, ask them what they want and show them the houses they want to see. If you have a policy that you only show houses to people who are pre-approved for an amount that covers a listing price, then make no exceptions to that rule. Don’t ask one person for a pre-approval but not ask another."
5 Fair Housing Tips for Real Estate Agents
What advice do seasoned real estate agents offer about fair housing? Here are five tips to keep in mind.
1. Know the Laws and How to Follow Them
"Real estate agents must know what the fair housing laws cover and how they can ethically follow such guidelines," said Jason Gelios, Top Producing REALTOR® with Community Choice Realty, Expert Media Contributor, and Author. "Being educated on what the guidelines are for fair housing is even more important these days than ever before."
2. Be Mindful with Your Property Listings
"Another thing a real estate agent must be careful of is the use of language when it comes to property listings," said Tal Shelef, Realtor and Co-Founder of Condo Wizard. "Simply describe the house you're selling and do not refer to people who are a perfect fit to live in the property."
3. You May Be Tested at Any Time!
"Agents should also be aware that they can be 'tested' at any time during their career," said Gelios. "'Testers' are disguised individuals who contact agents at random and use certain questions to see if the agent will break fair housing laws by how they react or the language they use. Even if an agent is not feeling like they are being discriminatory, the words they use could still violate fair housing laws on the federal and/or state level."
4. Let Buyers Be the Judge
"It's also important for agents to understand that something as simple as describing a neighborhood as being a good neighborhood or a bad neighborhood can be construed as steering and therefore discriminatory," said Jonathan de Araujo, real estate broker and investor at Vantage Point. "Suggest that buyers do their own due diligence, but let them be the judge of whether a neighborhood is a good fit for them or not. Better safe than sorry."
5. Watch out for Seller Violations
"Be mindful of seller requests that may violate any fair housing rules," said Pfaff. "Even if a seller makes demands that would violate fair housing, that is no excuse for an agent to carry out their wishes. If you violate fair housing because your client asked you to do something illegal, then you are just as guilty."
You Get to Help Promote Equal Access to Housing
It's important to pay close attention to the Fair Housing regulations when you are going through your real estate pre-licensing education. And if you ever have any doubts, check with your broker and always err on the side caution. These laws are in place to help everyone have equal access to the housing available, and as a real estate agent, you play a key role in making that a reality.
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