Piggybacking off of a video posted by fellow friend + musician + real estate agent, Jay Lesko, we agents are privy to an astounding insight into people’s lives while serving as the fiduciary for our clients.

In this role, there’s a lot that’s verbally and nonverbally communicated, a lot that’s revealed about our attitudes and beliefs, a lot of miniature windows into what people’s lives are like from a wide variety of backgrounds.

Jay, thank you for standing up for your clients.

Given the heightened discourse regarding racial issues, I’d like to highlight three words:
Steering.
Redlining.
Blockbusting.

These are terms that are hammered into every real estate agent’s minds when getting licensed. Let’s unpack it a little bit:

=========
Steering:
=========

“I’d like to look for homes in the good part of town.”
“I want to stay in the good school districts.”
“I want to avoid the areas with a lot of XYZ people.”

These are incredibly common things that home buyers ask for and are illegal for real estate agents to abide by. Why? Because “good” is subjective. Agent cannot decide for clients what a “good school” or “good part of town” or “[insert protected class] areas” are.

If you think about the implications of how much influence agents can have in swaying demographics, it’s pretty staggering.

==========================
Redlining (particular to real estate):
==========================

Refusing or charging more for a mortgage or renovation loan based on race and/or which part of town someone was interested was purchasing.

For a time, redlining was backed by the US government. The practice started in the 1930s and involved boundary maps drawn in urban centers showing what areas were considered higher risk for mortgage default vs the “more desirable” neighborhoods.

Disproportionately, minority purchasers who were financially qualified would be denied a mortgage, charged more, or would be turned down if they were looking into areas where they were unwelcome/deemed a risk.

So yes, the dream of home ownership remained just that and only that for many minority families for generations: a dream. And when you consider that one of the most significant markers for upwards mobility is homeownership, we start understanding how the wealth disparity was further perpetuated.

Today, this ties in with predatory lending where lenders may offer risky loans (for both home purchases or HELOCs) to low-income borrowers.

(Source & further reading: https://www.cbsnews.com/news/redlining-what-is-history-mike-bloomberg-comments/)

========================
Blockbusting (AKA panic selling):
========================

Let’s rewind several decades. Imagine you’re a real estate agent. The practice of redlining has been outed and stopped (at least openly). You start wondering how you can capitalize on it. After all, you’re paid on commission of home sales.

Well, how about steering black home buyers into previously off-limit, predominantly white neighborhoods and charging a premium because it’s a “good neighborhood.”

But you don’t stop there. Once black families have moved into these previously off-limit, predominantly white neighborhoods, you start going around telling the white neighbors, “Look who’s coming to the neighborhood! You better sell now before more come and property values sink!”

You find the fearful neighbors, get them to sell and repeat the process.

You have now participated in blockbusting. Congratulations, and here are your fat paychecks.

(Source & further reading: https://www.blackpast.org/african-american-history/blockbusting/)

My message is this for those who’ve managed to read this far: Take care when choosing someone to represent you in the sale, purchase, or leasing of your home.

It’s among the largest financial transactions you’ll do in your life and the life of the person on the other side of the proverbial signing table.

Who you choose to hire to aid, advise, and support you in the process will be a reflection of/social vote for what you value in more ways than you may realize.

(No matter where you are, I’m always happy to interview agents for you/your friends/family/etc at no cost.)