What Is Steering In Real Estate

This post was last modified on December 6, 2023.

If you are looking to buy a property, navigating the world of real estate can be overwhelming, especially when faced with the many specialized terms used in the industry. One such term that you may have come across is “steering.” This article will explore what steering means, why it is illegal, and what you can do if you encounter it.

What is “Steering” in Real Estate?

Steering is a practice in which a real estate agent influences a property buyer to purchase a particular property based on their unconscious prejudices. This practice is illegal because it goes against the Fair Housing Act, which prohibits discrimination based on race, color, religion, national origin, sex, disability, and familial status.

For example, if a real estate agent withholds information about properties that meet a potential buyer’s criteria based on their prejudices, they are engaging in steering. Similarly, if a real estate agent shows properties only in certain neighborhoods based on the buyer’s race or ethnicity, they are guilty of steering.

It’s worth noting that some steering can occur due to miscommunication or vagueness. For instance, if a buyer requests properties in a “safe” or “good” area without specifying their criteria, the real estate agent may interpret these terms based on their prejudices, which could lead to steering.

What Should a Buyer Do if They Notice Steering in Real Estate?

If you suspect that a real estate agent is steering you, it’s essential to report it. You should immediately drop the agent and find another agent who does not engage in discriminatory practices. You can also report the agent to their brokerage or other relevant authorities to prevent this behavior from continuing.

What Can Real Estate Agents Do to Avoid Steering in Real Estate?

Real estate agents can take several measures to avoid steering. Firstly, they must take the time to evaluate every choice when looking through properties. When a potential buyer tells them to look at “nice” or “good” properties, they must consider their potential unconscious biases.

Real estate agents must be objective and show potential buyers properties that meet their criteria, regardless of their identity characteristics. If they are unsure or believe their biases may influence their decisions, they should communicate directly with the buyer to clarify their criteria.

For instance, if the buyers say they want to live in a “nice” neighborhood, the real estate agent should ask them to elaborate and clarify what they mean. They can also ask the buyers about their price points and any specific features they want in the property.

Frequently Asked Questions

What is Steering vs. Redlining?
Steering and redlining are both illegal, discriminatory practices under fair housing laws. Steering refers to influencing property buyers based on unconscious prejudices, while redlining is denying loans or insurance based on a person’s race, ethnicity, or other protected characteristic.

What are the Penalties for Steering?
Steering in real estate can result in civil fines, lawsuits, criminal charges, revocation of a real estate license, and damage to an agent’s reputation. The penalties can be severe, so real estate agents must avoid discriminatory practices like steering.

What is Puffery in Real Estate?
Puffery is a legal term that refers to the act of exaggerating the value or qualities of a property to persuade someone to buy it. It is not considered a deceptive practice as long as the claims made are not false or misleading. For instance, a real estate agent may describe a property as “gorgeous” or “amazing,” even if it’s not objectively true.

How can I protect myself from steering?
The best way to protect yourself from steering is to educate yourself about fair housing laws and the signs of discrimination. If you feel that a real estate agent is engaging in steering, you should report them immediately and find another agent. When communicating with real estate agents, you can also research the neighborhoods you are interested in and be clear about your criteria.

Final Thoughts

Steering is a discriminatory practice that violates fair housing laws. It occurs when a real estate agent influences a property buyer based on their unconscious prejudices. As a buyer, you must educate yourself about the signs of discrimination and report any instances of steering. Real estate agents can avoid steering by being objective, communicating clearly with potential buyers, and taking the time to evaluate every choice when looking through properties. These and other critically-important topics are discussed in Chamberlin Real Estate School’s Real Estate Salesperson Pre-license Course.

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