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Steering, Schools, and Equal Professional Service

June 9, 2014

The REALTORS® Code of Ethics commits members of the REALTOR® organization to providing equal professional service without discrimination based on race, color, religion, gender (sex), sexual orientation, disability (handicap), familial status, or national origin. That commitment reflects the same principles embodied in the Fair Housing Act, which prohibits such discrimination in housing-related transactions.

What is Steering?

“Steering” under the Fair Housing Act is the process of influencing a buyer’s choice of communities based upon the buyer’s race, color, religion, gender, disability, familial status, or national origin. Steering on the basis of any of the characteristics defined under the Fair Housing Act is not only unethical, it’s illegal because it limits the housing opportunities available to that buyer. Steering occurs when an agent limits the housing options available to a buyer by directing prospective homebuyers interested in equivalent properties to different neighborhoods or communities or even different parts of the same development according to the buyer’s race or other characteristics protected under the Fair Housing Act. One way such “directing” can occur is through comments by an agent, either positive or negative, about a community. For example, if an agent limits or does not provide housing options to a buyer in a community because of the community’s racial composition, that agent may effectively be making housing unavailable. Or if an agent expresses his or her own positive or negative views about certain communities or schools, the purpose of which is to direct a buyer either towards or away from a community, then that agent may be stating a housing preference based on race or familial status or religion. These would be violations of the Fair Housing Act and of the REALTORS® Code of Ethics.

Nothing in the Fair Housing Act limits buyers’ choices of where they want to live. On the contrary, the Fair Housing Act protects the buyer’s ability to choose housing and prohibits certain actions by sellers, real estate agents, and others who might otherwise limit that choice. This raises the question of what an agent can do to accommodate a buyer’s preferences. Nowhere is this more of an issue than when the question of schools comes up during the homebuyer search.

Discussions about schools can raise questions about steering if there is a correlation between the quality of the schools and neighborhood racial composition--or if characterizations such as “a school with low test scores” or “a community with declining schools” become code words for racial or other differences in the community. Similarly, making unspoken distinctions by promoting a school in one district while keeping silent about the quality of another school can have the same effect. These become fair housing issues.

What is equal professional service?

The National Association of REALTORS® created the Equal Professional Service Model to help real estate agents adopt practices that enable them to anticipate and to address housing search issues fairly and equitably. Consistency is the cornerstone of this model. It involves using systematic procedures to help ensure that agents and real estate firms are providing consistent service to all their customers. The keys to the model are offering objective information, providing a variety of choices, and letting the customers set the limits of their housing search. Schools offer an excellent example of the Equal Professional Service Model at work. “I often hear REALTORS® say ‘I’m not allowed to talk about schools,’” says Fred Underwood, director of diversity for the National Association of REALTORS®. “In fact, schools play an important role in a homebuyer’s decision. And it’s important for REALTORS® to understand how to address their questions.” Based on the Equal Professional Service Model, use the following approaches.

  • Let objective information, not subjective information, be the guide. When customers ask, “How are the schools?” The best thing a REALTOR® can do is guide them to third-party information, so they can make a decision on their own. “It’s okay to talk about schools, but don’t make the judgment call yourself,” says Underwood. “Give homebuyers the resources they need to make the decision for themselves. Remember, it’s not about your kids. It’s about their kids. Every child has different needs, and every family has different preferences.” Objective information is easy to document and quantify and is widely available, given the widespread use of the Internet. Some states even have websites that compare schools. “Keep a list of school or community-based websites that offer information about schools so you’re prepared to provide those web addresses to your customers,” says Underwood. “Better still, build relationships with local schools, so you know where to direct people’s inquiries. Be equipped to provide contact information at schools or make appointments with the schools so your customers can go visit the school and find out for themselves.” 

A buyer who wants a home in the Abraham Lincoln school district is providing an objective criterion for a home search. An agent can clearly identify and find housing in that school district. On the other hand, a buyer wanting a home in a “good school district” is unclear about what he or she wants. Is it the school with the best football team, the most AP students, the newest facility, or something else? Agents attempting to choose homes based on this kind of request substitute their own judgment for the buyer’s regarding what makes a school good.

  • Offer a variety of choices. This is a good way to make sure you are not limiting choices beyond what the buyer has asked for. While schools are an important criterion for many home seekers, they are not the only criterion. For example, a buyer who wants a house in the Abraham Lincoln district also has a price range, size, style, and other factors in mind. Would you offer a four-bedroom house to a buyer who is looking for three bedrooms? How about a two-bedroom with room to expand? Offering housing that otherwise meets the buyer’s needs but is outside the Abraham Lincoln school district is a way to expand choices. And by offering choices in a systematic way, real estate agents can respond consistently to homebuyers’ needs.
  • Let the customer set the limits--and make his or her own choices. By providing objective answers and resources and offering a variety of choices, the agent can take direction from the choices buyers make. That enables an agent to help buyers narrow the search to find the houses they want to buy. Take the example of the customers looking for a home in the Abraham Lincoln school district. If an agent offers them options outside the district but they decide not to pursue that option, their decision allows the agent to confidently move forward with finding homes only in that school district.

If, however, the buyer chooses to pursue a house outside the Abraham Lincoln district and raises questions about the schools, the way an agent responds to comments or questions such as “I heard this area has bad schools” or “Where do you send your children to school?” can mean the difference between steering and providing equal professional service. A truthful response is not necessarily a violation of the law, but the buyer could perceive such a response, even if truthful, as a way of limiting choices or as discrimination. Instead ask, “What makes a school good for you?” and then suggest a third-party source such as a school district website. That allows the agent to refocus the search on objective information available to the agent.

In any case, an agent should keep good records documenting the buyer’s initial request, the options provided outside the district, and the subsequent decision to stay within the district.

Finally, how does a REALTOR® deal with stark differences in school quality?--By providing access to objective information. “There’s nothing wrong with a REALTOR® providing a list of all the school or community websites or setting up school visits to help buyers get the information they need to make informed decisions,” says Underwood. “In fact, that’s a valuable service, particularly for out-of-towners.” In the end, providing access to objective information helps buyers make their own decisions about schools, communities, and the homes they choose.