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Guidance vs Steering in Real Estate

What is Steering?

Steering, in its basic form, means directing someone or something towards a particular direction. Steering is illegal in real estate, and involves influencing a buyer's choice of communities based on characteristics like race, color, religion, gender, disability, familial status, or national origin. For example, agents might not show buyers properties in certain areas or might express biased views about neighborhoods, thus directing clients away from or towards specific areas based on protected characteristics.

Guiding Clients to the Best Outcomes

However, real estate agents also have a positive guiding role. Their fiduciary duty involves keeping clients focused on properties within their budget, pointing out potential long-term financial issues (like structural defects), and helping clients find beneficial loan programs. Agents should provide necessary information for informed decisions and respect the choices clients make.

Avoiding Negative Steering

To prevent negative steering, agents should:

  1. Provide Objective Listings: Offer properties based solely on clients' specified criteria.

  2. Clarify Vague Terms: When clients use terms like "nice," "good," or "safe," ask impartial questions to determine specific property features and price points.

  3. Communicate Objectively: Share only objective information about neighborhoods and direct clients to third-party sources for detailed community information.

  4. Recognize Unconscious Biases: Be mindful of any biases when evaluating what clients want and ensure these do not influence the areas shown.

For instance, if asked about neighborhood safety, agents should suggest clients research statistics online rather than providing a subjective opinion.

By adhering to these practices, real estate agents can ethically guide clients without falling into the trap of negative steering, ensuring that they meet both legal standards and ethical obligations.

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