What is Steering in Real Estate? Why does it Happen?

Steering is a term used when referring to real estate. It is the act of someone, usually real estate agents or other professionals in the industry, influencing or trying to influence your purchase decision for their benefit.

This could be steering you towards one property over another, or even away from a particular property altogether. Oftentimes, steering is executed by misrepresenting or withholding information from the buyer in order to get them to buy a property that the seller wants to move.

Key Takeaways:

  • Refers to the unethical practice where agents or professionals influence a buyer’s decision, often for their own benefit.
  • Steering is illegal under this act as it involves discrimination based on race, religion, occupation, etc.
  • Can lead to buyers purchasing unsuitable properties, resulting in potential financial and legal issues.
  • Buyers should be well-informed, conduct their own research, and be ready to walk away if misinformation is suspected.
  • Document all interactions and seek legal advice if you suspect you’ve been steered during a real estate transaction.

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 personal 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 or even just have an interest in purchasing a property that would house your future practice, steering could be considered discriminatory since it is restricting you from seeing homes for sale based upon your profession. This can also apply to other professionals who may be discriminated against in the same way.

Why Does It Happen and What Can You Do About It?

mortgage denied

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.

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.

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 Feel Like 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 if they seem to be avoiding your questions, it may be time to find a new real estate agent.

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.

Finally, document everything! Write down the name of your real estate agent, the name of their company, and any instances where you think steering occurred.

What Are the Consequences of Steering?

What Are the Consequences of Steering

If you are a victim of steering, there are several consequences you may face. Perhaps the most significant is that you could end up purchasing a property that is not right for you, which can lead to financial and legal troubles down the road. Additionally, if you feel like you were intentionally misled or deceived by the seller or their representative, you may have the legal right to seek compensation.

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 earnest money deposit.

If you feel like you were a victim of steering and purchased a property that was not right for your needs, there are certain steps to take. To begin with, it is important to document all the specifics about what occurred during the purchase process as soon as possible after becoming aware of what happened.

For example contact information (dates and times) of anyone you spoke to about the property, what was said or not disclosed by the other party, and any written evidence such as emails or text messages.

From there, you can reach out to 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 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:

  • Be sure you have all of the facts about a property before making an offer.
  • Be prepared to walk away from a purchase if you feel that the real estate agent is not being honest with you about the information they are withholding.
  • Do your own research on any neighborhood or home prior to signing an offer, including recent sales in the area.

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

What Are Some Other Ways You Can Be Steered?

properties in one neighborhood

Aside from steering you away from certain neighborhoods, areas, or types of properties, a professional can also steer you towards property for sale. This is often done in order to make the sale and may involve hiding information from you about other available homes that are for sale.

For example, if there are three similar properties on the market, but the seller’s agent only shows you one of the homes, the most expensive home on the market. This is because they understand that you can’t afford to purchase all three of them and hope that you decide to go with what they are showing you which may not be right for your needs or budget.

The same thing goes 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 that it’s your only option and hope that you’ll make an offer on it.

What can I do if I’ve been Steered in Real Estate?

Real Estate lawyer tips

If you have been steered in real estate, it is important to take action as soon as possible by documenting what happened in order to ensure that you have the best possible case against the person or company who steered you.

This is done by taking note of what was said, evidence such as emails and text messages, contact with other professionals in regards to buying a home (inspectors, appraisers), any information given about previous clients who were also/were not steered, etc.

If you are interested in bringing a case against someone who may have steered you towards or away from certain properties for sale without your knowledge (intentionally), it is important to seek legal counsel as soon as possible before any evidence gets destroyed and/or memory fades.

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 subtle 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 own online property searches can provide a broader view of available properties and help counteract potential steering by agents.

Bottom Line

In the realm of real estate transactions, 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 crucial steps in safeguarding against steering and ensuring a fair and unbiased property buying experience.