Real Estate Blog - Fair Housing - Beware of Testers!

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Fair Housing - Beware of Testers!

REALTOR Beware! This is an actual recent email dialogue between someone contacting me to list their home, my response, and theirs.

I received a call from them, secured their email address, and sent them a Market Snapshot from Top Producer, to be followed by a detailed CMA that evening.

I then received the following email:

Fom The Seller

"Thank you for the report. I received your phone message this evening. I will call you on Thursday to get more information from you. Thank you for your prompt response. I would also be interested in knowing the specific ways you would plan to market our property particularly to target the primarily hispanic population/potential buyer in the area. We feel it will be crucial to have information and communication that will be presented in both english and spanish and marketing strategies to monopolize on the foot and road traffic we get from the two schools adjacent to our home. I look forward to hearing your advice."

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From Tony Marriott

"Thanks for the confirmation of receipt of both the Market Snapshot and my voicemail message.

A detailed Comparative Market Analysis (CMA) will follow by email this evening, along with marketing information for your review prior to our discussion.

While we will certainly ensure that marketing activities are in both English and Spanish, we are prohibited by the Fair Housing Act (Equal Housing) from "targeting" specific ethnic groups. For example, we could not advertise the property only in a newspaper printed in Spanish that is popular with a specific ethnic group. Similarly, we are prohibited from "targeting the primarily Hispanic population/potential buyer in the area" as suggested in your email.

With that understanding, we can market and promote your property to secure a buyer from the marketplace - which includes all prospective Buyers.

I look forward to our discussion tomorrow regarding next steps.

Best Regards"

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From The Seller

Silence for five days followed by this email:

"Thank you for your information and time. We decided this week to go with another realtor, but appreciate your response."

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Did the Seller get a REALTOR willing to target an ethnic group? If so, does the REALTOR understand the consequences of their accepting such a listing? Or was it a government official "testing" us?

Know the rules, obey the rules, and if something seems "unusual" - ask your Broker!

Thoughts from fellow Active Rainers?

Posted by Tony Marriott, Associate Broker, CRP, CLHMS, CRB, CRS ~~ Phoenix Arizona on 02/22/2007 07:09 PM

Comments (80)

fair housing, target, steering, ethnic, rules, broker

Originally posted at: Tony Marriott's Phoenix Arizona Real Estate Blog: Fair Housing - Beware of Testers!

80 Comments on Fair Housing - Beware of Testers!

FEB

2007

Please see this post by James Gordon on the same topic.

Tony - My thoughts are that you did the right thing. And you probably dodged a bullet. I don't know if these people were testers, but would they be sellers that you would want to work with? Even if they agreed with you and chose you to represent them, the issue of race/ethnicity would probably continue to arise as they pushed their own marketing ideas on you.

Consider yourself lucky! And, you did the right thing.

I had a situation like that just over a year ago. The sellers wanted to hire a hispanic agent thinking they could "target" that population better. Instead, a friend of theirs referred them to me. They reluctantly listed with me overpriced. I tried everything I could to get the price where it should be, but with it being a referral, I couldn't just decline the listing.

Long story short, when it didn't sell in 3 months, they told me they were just going to allow their son to live in the house while he was in college. I'm not stupid... I checked the MLS later that week and it was listed by a hispanic agent for the price I was begging for. It didn't sell because the agent was hispanic; it sold because it was then priced correctly!!

So may times we are asked to do things that clients do not think violate the law. You have to stand your ground and make them aware of the laws that we must all abide by.

Tony,

I'nm not sure which is worse:

A seller getting a REALTOR® willing to target an ethnic group or

A government tester condoning it by telling you that went with another REALTOR® rather than the truth that it was a test and you abided by the law.

So did you get the listing? lol!!!! I have heard this before property particularly to target the primarily hispanic population/potential blah blah blah. I do alot of buisness in Atlanta, and we saw this about 5 years ago.

Christopher - Nope - and wouldn't have taken it knowing their announced pre-disposition.

Don - Thanks for the endorsement of the path I followed!

Donna - Sounds like a frustrating experience. Validates I dodged a bullet.

Mitchell - You are right on target - either one is bad. Leaves a bad taste!

Excuse me if I might seem to be ignorant of the law here. I know that an advertisement can't show preference to a specific protected group but I never knew that you had to advertise in diverse media. Would it really be against the law to only advertise in Hispanic newspapers? If I advertised in a Hispanic newspaper would I have to also advertise in a black newspaper or a Jewish newspaper in order to not show a preference? Logically, how far would you have to go with this.

I'm always looking to improve my understanding in this area because the consequences could be very severe.

Tim - When I first heard it in a CRS class some years back it took me by surprise as well - however - according to the instructor (Broker, CRB, many years in the business) it would be considered steering/targeting. The way to avoid that would be to place the same ad in a widely read newspaper - Arizona Republic - in addition to the Hispanic newspaper. That said - I don't do newspaper ads!

There have been times I've had a sneaking suspicion I'm "being tested". I handle my business as if I'm being tested. The threat of "testing" is good.

Tony- You got me spending the day reading all the fair housing regulations. It's amazing what you can learn when you go back and really read the source material. I did finally find the section about advertising only in specialized areas. Thanks for mentioning it and making me do a little research.

First, let's be clear about one thing...sellers are not up on Fair Housing....some agents need a refresher course too! But to have clearly stated to them that to do what they were asking was breaking the law and left it at that....well, you informed them...for them to list with someone else because of that info, more power to them because something else would have come up during the listing anyway!!! If they were testers, you passed with flying colors. I like the mention above that conducting your business like everything is a test will certainly keep you on your toes. Good Job!

This has been really helpful. Between this and Joe Zekas's blog I learned quite a bit about fair housing. I think my weekend reading is going to include lots of time on HUD's web site.

Suzi - They really are watching us! :-))

Tim - You are most welcome. It never would have occurred to me had it not been raised by an instructor. I'm glad they knew about it!

Sharon - Thanks for the suppport - and your comment prompted a thought - given that Fair Housing is a Federal Law - can FSBOs get "in trouble" for violating it? I'll check around....

Melissa - It all seemed to come together at the same time - wonder what the subliminal influence was? Has this been on the main media recently?

FEB

2007

We have active testers in our area. I am always mindful of what I say at all times. The usual area I get tested is from buyers moving from out of state who ask lots of leading questions. I always let them know up front that by law I can not steer them towards or away from neighborhoods.

I will give them sources, like the department of education website where they can do their research. The number one question I get is how are the schools?

Tony - Realtor Magazine Online just posted this article today, stating that testers in NJ filed a complaint against a landlord and his real estate agents. I thought this was rather timely.

Randy - That's the way I handle it.

Don - Very timely article!

Tony, you did the right thing. You may give the seller the benefit of the doubt for not knowing any better...but after you sent the Fair Housing Act, it seemed quite clear they wanted to either test you or as Don says very well, they would be a problem to work with any way in the future as far as ethic/race marketing. That was not a quote.Kudos for going the high road!I wouldn't work with them that is for sure!I think some are just plainly playing dumb and ignore ethical rules.

FEB

2007

I doubt YOU can get tripped up with something as blatant as that. Good work and thanks for the reminder.

What confuses me is the loan programs targeting and being advertised to specific ethinicities; I guess I have some reading to do.

Tony, thanks for this post. It doesn't surprise me that you responded the way you did. Thanks for keeping that bar raised.

I think you made the right decision, Tony. Even if they were legit sellers, it seems that working with them would be problematic on a number of fronts.

To your point on advertising and steering, your comment is my understanding as well, from talking with brokers, and in my CRS and other classes - no implied or explicit steering or targeting.

Sounds like testing is pretty common (I have not run into it) in many areas, and being prepared always makes sense. Sound like you are always ready and pass with flying colors!

Jeff

You had an opportunity to do the right thing and you did. Bravo! It will pay off in the long run.

Well done! My response would have been the same as yours. Did you send another reply asking what features the other REALTOR offered that were more attractive than yours (or something similar?) Since you were preparing a CMA, I assume you know the address. Did you ever find out if there actually was a competing REALTOR by searching the address in the MLS or if it was perhaps a test?

I think I agree with Mitchell. Although I do believe that it is important to test Agents as a way of monitoring ourselves. I think as Mitchell pointed out , if a test were employed that there should be some statement either to the agent or Real Estate publication acknowledging the test and in effect a congratulations to those who had essentialy passed. And for those that didn't we will read about them and thier punishments in the Real Estate Journal.

Having a Government agency test and advertise the positive results would be a good thing for our industry.

One word 'SCARY!"....Tony, thanks for taking the high road. It would be interesting to follow this listing, find out who got the job, and observe how they market it.

Awesome response Tony! Have you checked to see if the property is listed by another agent?

Can't wait to meet you and Suzanne tomorrow!

Tony, looks like you escaped what will end up being a bad situation for someone. No sale is worth losing your reputation and business.

It should be mandatory for a tester to tell you as soon as you have been tested. It is a real shame they can just tell you they chose another Realtor and walk away. We walk a very straight line with what we can and cannot say.

Tony, it looks as though you followed not only what we stand for but also your heart and soul as well. Good for you. Sometimes, doing the right thing may seem difficult at the time but in the end it's all worth it!

There are so many different ways that we could easily cross that line in our day-to-day activities if we're not careful. Glad to see you're on top of it. The bad thing is, I've seen some well-intentioned professionals fall into traps before. It certainly makes us more aware, maybe even skiddish.

Tony,

Not to go off on a tangent, but do you really send a CMA by e mail to prospects you've never met? How can you do that without seeing the house? How do you know they are not your competitors who want to see your work? Also, do you trust your customer to be able to interpret it without you going over it with them?

I have never been tested, but have heard of folks showing up as buyers in offices to see if there is steering going on. My thoughts are that these are real sellers if they had a house, but I'd love to find out if it hits your MLS.

Tony,

I am so glad you posted that today -- and the commentary that followed was really good. Congrats on how you handled situation.

You are a professional

FEB

2007

Yikes.
It's amazing that there's people out there that don't understand the laws. This is not just in real estate, it applies to hiring practices as well. I have extensive background in human resources and we are always very careful in dealing with these issues. Anyway, thanks for the heads up.

I actually had an seller/Realtor asking me about my buyers ethnicity and other personal information a few months back. I told him that I could not answer those questions because it was against the law. He responded by asking me if I was refusing to answer. My answer was to repeat I can't it is against the law. I wonder if he was a tester or an idiot?

I've heard a couple of stories of secret shoppers also. Know your laws and just be ethical. -Aloha

Obviously this is another hot topic. You handled the situation professionally and with the utmost integrity and that's admirable. As a new agent, I haven't had this scenario, but I hope I have the good sense to handle it the way you did. Great job and great post!!

It's a shame that the general public doesn't fully understand that there is a lot more to real estate than a sign in the yard and an occassional open house. Way to stay on your feet.

Thanks for all the comments left in the last couple of days - I'm out of town on business and will respond to each one when I'm back at home base this weekend.

Congrats on the Gold Star - even if it took a week to arrive! I can't wait to read your entry for the contest!

I took the GRI Risk Management class this week and the majority of the material we covered dealt with Fair Housing violations. Thanks for posting.

FEB

2007

Ya did right in your responses....and even if it WAS a gov't official "testing' you... you PASSED the test....

You can sleep well at night knowing you have a clean conscience.....

=-D =-D

FEB

2007

Years ago, I worked as a tester. Most testing is done by private non profits, not the government. Things have change in the years since I did the work, but usually it was done in teams to see if minority and majority appicants were treated the same. In those days, an email like this would have been followed by a buyer looking for a home in that area in that price range to see your reaction from that side also.

Tests usually are not done at random, but are based on a complaint from someone to see if there is a possibility that the complaint is legitimate, You probably really did run across one of the sellers out there who is either unaware of or doesn't care about fair housing laws. I am very sorry he found a REALTOR who would go along with this.

Lloyd: I wouldn't work with them that is for sure!I think some are just plainly playing dumb and ignore ethical rules.

That's how I read the situation - thanks for the support!

Brian - Thanks for the vote of confidence!

Maggie - Thanks for the comment and the recognition of the importance of keeping high standards!

Jeff - Thanks for the validation - I'm glad I had the knowledge from those CRS classes!

Judi - Thanks for the support!

Brian: Well done! My response would have been the same as yours. Did you send another reply asking what features the other REALTOR offered that were more attractive than yours (or something similar?) Since you were preparing a CMA, I assume you know the address. Did you ever find out if there actually was a competing REALTOR by searching the address in the MLS or if it was perhaps a test?

I did not reply as I checked the MLS and found there was indeed a new Active listing - so did not even want to go there for two reasons:

I didn't want to give the perception of interfering with the relationship between Seller and Listing Broker
I didn't want to be put in the position of being told that the other Broker had agreed to do something illegal - as then it would be my obligation to report it, etc.

Herb - I wholeheartedly agree with your point about the bureaucrats sharing the positive as well as the negative!

Rich - When I have a moment I make take a drive by just to satisfy my own curiosity - I'll share the results!

Renee - Yes - There is an Active listing last time I checked - will take a look later this week.

George - Your comment says it all!

Virginia - Sort of "smells" like an attempt at entrapment in a way. I think many agents would not even realize they were being asked to do something "wrong".

Gena - I went with my gut instinct on that one! Hope it continues to serve me as well as it does now after I've met my diet goal!

Ryan - Yep - it sure smelled like a trap for the unwary.

Rick: Not to go off on a tangent, but do you really send a CMA by e mail to prospects you've never met? How can you do that without seeing the house? How do you know they are not your competitors who want to see your work? Also, do you trust your customer to be able to interpret it without you going over it with them?

Yes - absolutely will email a CMA to prospects I've never met. It's essentially a "pre-listing" package. If they don't want to meet after that, then I've saved myself a ton of time! The email is always followed by:

A conference call to discuss in detail if they are out of town
A listing appointment to dsicuss at my office - or another KW office if that's more convenient for the Seller - keeps the distractions out of the discussion.

Sellers will always try to inflate the value of their house for some reason or another. The MLS tells the tale of how to price it correctly.

It did hit the MLS - not sure if it's appropriate to post the Listing info - my gut says no - so probably won't do that.

Competitors are welcome to see my work - no problem with that. Out of those that see it - how many will actually use it? And if they do - more power to them! I think you'll find that many of the most successful teams and agents are willing to share, as others share with them and together we all continue to improve.

Aziz - Thanks for the comment and the support!

Tracy - Thanks for the comment and appreciate the HR perspective.

Randy: I wonder if he was a tester or an idiot?

I suspect he was the latter, even if he was also the former!

Kengo - Thanks for stopping by!

Ed - Happy to have been of help!

Angela - Thanks for the kudos - much appreciated!

Debbie - The GRI classes are a great way to hear about real life situations.

Alexander - Thanks for the vote of confidence!

Deb - Thanks for the additional information. I agree with your evaluation - this was more likely a "real" Seller who was clueless or didn't care about the law.

Egads.....

Every now and then, I get a 'strange' call or e-mail, and wonder if it's a test....I really wish they'd tell you if you give the right response that indeed, they are 'testing' your adherence to fair housing.....

Congrats on passing the test with flying colors! Well put!

FEB

2007

Sharon - Thanks for the comment - and the confirmation that there are some strange callers out there in our neck of the woods!

FEB

2007

Good post, this has a very good point, you should always know and follow the rules because you never know

MAR

2007

I was tested in my first week in the business. I was doing floor time and got this call, Don't want to live in these kind of area and don't want this and that. Don't want Crime, where can you find me that home. Don't want to live in that city...Blah Blah Blah.

I advised them that, the best I could do is send them all the homes in the metro area that met their critiria for bedrooms, bathrooms and sqft. Then send them a link to the police for crime stats and they would have to make the decision on their own. I told them my job was to find them the perfect home as they described. As for neighborhoods and the people who they choose to live next to that would have to be their decision.

I will just send homes based on the home discription. They called 3 other people in my office later that week and 2 passed the test and 2 didn't from what we got told at the next office meeting. Was never called in to the office, but did notice 2 agents not on floor time for 3 weeks.

MAR

2007

Daniel - When in doubt.......

Todd - Sounds like your office was under close scrutiny for some reason.

Given the importance of Fair Housing to consumers and the strict consequences of failing to practice real estate to the letter of the law, I'd say you handled this EXACTLY right. I have bookmarked this post for future reference.

Kelly - Thanks for the validation and the comment! Tony

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