What Is Steering in Real Estate?

Have you ever wondered why a real estate agent wouldn’t directly answer one of your questions? What are the best schools in this city? or Is this neighborhood safe? may seem simple enough to address. But if your real estate agent isn’t giving you a straight-up answer, it might not mean they’re a cornflake after all. In fact, they’re likely trying to avoid steering in real estate.

What Is Steering in Real Estate?

Real estate steering is when a real estate agent influences a client’s decisions based on one of the characteristics outlined in the Fair Housing Act—things like race, religion, gender, disability, familial status or nationality.¹ This is typically thought to affect home buyers more often than sellers, as an agent could guide or “steer” them toward or away from certain communities based on bias. But a seller could also be “steered” to consider offers or potential buyers because of bias as well.

Basically, if an agent, because of bias, assumes what a buyer or seller wants or doesn’t serve clients equally, they’re in the danger zone. That’s because steering in real estate is (you guessed it) illegal in the U.S.—and for good reason.

Why Is Real Estate Steering Illegal?

Get out your pencils, class—it’s time for a history lesson. Take yourself back to a time when civil rights, rock ’n’ roll, and Audrey Hepburn’s every move were the talk of the town: the 1960s. In 1964, the Civil Rights Act was passed—but minority groups often were still unwelcome or unable to purchase homes and live in certain areas because of discrimination practices.²

So, four years later in 1968, a follow-up Civil Rights Act was passed, including the very important Title VIII—aka the Fair Housing Act. The Fair Housing Act specifically banned discrimination concerning the sale, rental and financing of housing based on race, religion, national origin, sex, handicap and family status, which includes real estate steering.³ Today, the Department of Housing and Urban Development (HUD) enforces the Fair Housing act for renters, home buyers and sellers, and people getting mortgages.⁴

What Your Real Estate Agent Can’t Talk About

Some steering in real estate is plain as day. Steering red flag examples include:   

• Assuming clients want to buy in a neighborhood with people mostly of their same religion or race
• Redirecting a buyer from one area to another with “better schools”
• Only showing certain properties to a single woman based on her perceived ability to manage them

Now these are pretty obvious examples, but real estate steering isn’t always a clear-cut thing. Even if your real estate agent shares an off-hand opinion about an area, it could violate a law. That’s why good real estate agents will think before they speak and avoid answering certain questions. Here are some of the most common no-no topics you’ll likely want to learn about as a home buyer, but that your agent will keep a tight lid on:

• Crime rate: It’s totally normal to wonder about the crime rate in an area you’re unfamiliar with. However, depending on how you talk about it, crime stats could fall into squishy territory according to the Fair Housing Act.⁵ Rather than answer questions about crime directly, your agent can point you to public record resources like the local government’s website or the Neighbors app where you can check it out for yourself.
   
• School systems: We know you want junior at the best and brightest school around, but your real estate agent isn’t going to be much help identifying that. Agents can’t speak to a school system’s reputation, but they can talk about public information like test scores or programs a school has. Do a little research to figure out which school is a match for your child as well as schedule a tour. Even if a school looks promising online, you won’t know what it’s like until you go in person.
   
• Neighborhood demographic: Let’s say you’re close to retirement and looking for a community that’s not mostly young families. There’s nothing wrong with that—but a real estate agent wouldn’t be able to tell you that a certain neighborhood “isn’t right for someone your age.” Luckily, it’s not hard to find out what the people who live in an area are like. Make a visit to the neighborhood you’re curious about and ask residents about life there. Or join neighborhood Facebook groups to see what the people are like. If that helps you identify a spot with other homeowners your age—great! Let your real estate agent know you’d like to focus there.
   
• Places of worship: Realtors can provide you with a list of places to worship—but that’s about it since the Fair Housing Act covers people in protected categories like religion. If living by a trusted place of worship is a must-have, a good first step might be to ask the leaders at your current place of worship if they have any connections where you’re moving.

What Your Agent Should Do Instead

Your real estate agent wants to serve you—but your agent also wants to avoid real estate steering and keep it legal. Knowing this on the front end will help you respect your agent’s professional boundaries and will also help you recognize when they are (or aren’t) respecting yours.

Find a trusted real estate agent we recommend in your area.

Don’t get us wrong, your agent can and should advise you about different neighborhoods. In fact, they should be bona fide area experts! In addition to offering up objective information like stats about the local real estate market, agents should have resources at the ready for you to learn more about schools, safety, lifestyle—whatever you want to know. That way, an agent avoids the risk of imposing their personal bias, and the conclusions you come to are the only thing that guide or steer (this time, in a good way) your transaction.

What to Do if You Have a Biased Real Estate Agent

In some cases, talking with your agent about comments they’ve made that have raised an eyebrow might be enough to settle the matter without ditching them altogether. In other cases, you just have to go back to what the Good Book says: “The mouth speaks what the heart is full of” (Luke 6:45, NIV). That means that if an agent is communicating bias, their heart is probably full of it and it’s time to fire them.

But you have to be careful and read your contract. Usually, they’ll have you sign an exclusive buyer’s or seller’s agreement that has a defined expiration date. The first thing to do is speak with the agent’s broker and ask them to let you out of the deal. Brokers don’t want to be known as “the bad guy” in their communities, so they’ll probably comply.

If that doesn’t work, it may be time to get a lawyer involved. But if that’s too expensive or impractical, or if nothing else works, you may just have to wait out the contract. If your agent has any integrity at all, it shouldn’t come to this. In the meantime, you can start interviewing a replacement.    

Find an Agent You Can Trust

The good news is, there are amazing real estate agents out there who know (and keep) the law and are the best of the best at what they do. In fact, we know a whole bunch of them. All you need to do is get in touch with one of our RamseyTrusted^® real estate agents. These pros are at the top of their market and are personally vetted by our team for integrity. We wouldn’t endorse them otherwise.

If you’re looking to buy or sell a house, working with a real estate agent you know you can trust is totally worth it.

Find a RamseyTrusted agent!

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