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What is Steering in Real Estate? How to Avoid It?

A Woman Is Thinking About Steering in Real Estate
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Steering is a common term and an unethical practice used in real estate. This means when a person, often a real estate agent or someone working in that field, tries to convince you to buy something so it benefits them.

This could be steering you towards one property over another, or even away from a particular property. Steering usually happens when someone does not tell the truth or leaves out important details to make the buyer choose a property the seller is eager to sell.

Steering is illegal under this act as it involves discrimination based on race, religion, occupation, etc. This can lead to buyers purchasing unsuitable properties, resulting in potential financial and legal issues.

The Fair Housing Act

The Fair Housing Act makes it illegal for a seller or landlord to discriminate against any buyer who they believe may have children, is from a particular race, has physical disabilities, etc.

In addition to refusing to sell your property due to your characteristics as the purchaser (race, age, sex), steering can be considered discriminatory if they refuse to show you properties based on your membership to a certain group (religion, occupation).

For example, if you are currently working in the medical field, steering could be considered discriminatory since it restricts you from seeing homes for sale based on your profession. This can also apply to other professionals who may be discriminated against in the same way.

Why Does Steering Happen?

Why Steering Happens in Real Estate

There are a few reasons why steering happens in real estate. One reason is that some people may have preconceived notions about certain races or ethnicities and believe that they should not live near them.

Some agents may also be more likely to show homes in neighborhoods where they know the buyer will fit in racially or ethnically, rather than taking the time to show them all neighborhoods in the area, and houses that fit those buyers the most.

Another reason steering happens is that some agents may be trying to make a quick buck. They may know that they can get a higher commission by steering a buyer to a certain neighborhood instead of letting them choose on their own.

Technology and data analytics in real estate have made it harder to detect steering, as agents might blame algorithms for biased property listings.

Whatever the reason, steering is illegal and it’s important to be aware of what to look for if you think you’re being steered.

What Should I Do If I’m Being Steered?

What Should I Do If I’m Being Steered

If you feel like you are being steered in real estate, there are a few things you can do. First, talk to your real estate agent. Ask them why they are showing you certain homes and neighborhoods. If they can’t give you a good answer, or avoid your questions, it may be time to find a new real estate agent.

Also, if you are ever involved in a purchase contract that is subject to conditions or contingencies where there was not full disclosure on behalf of the seller, steering could be considered fraud even though it was unintentional. This can put your deposit money at risk since the sale may fall through and you will lose your money deposit.

If you feel you were intentionally misled or deceived by the seller or their representative, you may have the legal right to seek compensation.

Second, if you are working with an agency or company that is steering their clients in real estate, let them know. Let them know how this practice makes you feel and why they should not do it anymore.

You can contact a real estate lawyer who can help advise you on your next steps and whether or not you have a case against the person or company that steered you into real estate.

Finally, document everything! Write down the name of your real estate agent and their company, the date and time you communicated, etc. Keep written evidence such as emails and text messages. You can report your documentation and findings to the California Department of Real Estate, or call them on the Public Information Line at (877) 373-4542.

In some cases, steering has led to the creation of diverse cultural pockets within cities, as people of similar backgrounds were guided to live in the same neighborhoods.

How Can I Avoid Being Steered In Real Estate?

How Can I Avoid Being Steered In Real Estate?

There are a few things you can do to help avoid being steered in real estate:

  • Get all the facts about the property before making an offer.
  • Walk away from a purchase if you feel that the real estate agent is not honest or if he is withholding information.
  • Research the neighborhood before signing an offer, including recent sales in the area.

Victims of steering might end up in less desirable areas or overpaying for properties not fitting their needs or preferences.

Advanced technology and online platforms have introduced virtual steering, where online property listings might be tailored to users based on their digital behavior and demographics.

What Are Some Other Ways You Can Be Steered?

What Are Some Other Ways You Can Be Steered?

Aside from steering you away from certain neighborhoods, areas, or types of properties, a professional can also steer you toward property for sale. This is often done to make the sale and hide information about other homes available for sale.

For instance, imagine there are three houses for sale, but the seller’s agent only shows you one. They do this “knowing you” you can’t buy some of the houses, and hope you’ll pick the one they show, even if it might not suit your needs.

The same happens if there are multiple properties in one neighborhood (condominiums) but the real estate agents only show you a property that is not in the best condition or priced high. This is because they want you to think it’s your only option and hope you’ll make an offer.

FAQ

What Legal Protections Do I Have Against Real Estate Steering?
The Fair Housing Act provides legal protection against discrimination in housing, which includes steering practices. If you’ve been steered, you may have grounds to file a legal complaint.
Can Steering Occur in Rental Properties as Well as In Buying and Selling?
Yes, steering can occur in both rental and purchase markets, where agents might influence your choice of rental properties based on discriminatory factors.
How Can I Recognize Forms of Steering?
Subtle steering might involve agents only showing properties in certain neighborhoods or omitting information about available properties that meet your criteria. Stay vigilant and question inconsistencies.
Are There Any Specific Questions I Should Ask My Agent to Avoid Being Steered?
Ask your agent to provide a comprehensive list of all available properties that meet your criteria and inquire about the diversity of neighborhoods shown to you.
Can Online Property Searches Help in Avoiding Steering?
Yes, conducting your online property searches can provide a broader view of available properties and help counteract potential steering by agents.

Bottom Line

Steering represents a significant ethical and legal violation, often leading to discriminatory practices. As a buyer, awareness and vigilance are key to avoiding being influenced unfairly.

Understanding your rights under the Fair Housing Act, conducting independent research, and being prepared to question and report suspicious activities are important steps saving yourself against steering, to ensure a fair and unbiased property buying experience.

As long as there are homes for sale, buyers will need real estate agents to help them through the process. However, be an educated consumer and know when you are being steered to make the best decisions for your family and finances. Knowledge is power.

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