How Sellers Can Avoid Housing Discrimination and Fair Housing Violations

Home sellers may assume their real estate agent is the only person responsible and liable for complying with fair housing laws. But the laws apply to everyone involved in a real estate transaction, which means sellers can face complaints and charges of violations. Complying with the laws isn’t always as intuitive as you might think. Your real estate agent can help you understand them, making it less likely you’ll violate them.

What the Laws Say About Sellers and Fair Housing

Requirements: The federal Fair Housing Act prohibits discrimination in housing transactions based on race, color, religion, sex, national origin, disability or familial status. That means you cannot use any of those characteristics as a basis for deciding who buys your home or how your home is marketed.

Process: Anyone can file a complaint with the U.S. Department of Housing and Urban Development, which can trigger an investigation, says Nate Johnson, president of Real Estate Solutions Group at RedKey Realty Leaders in St. Louis.

Consequences: The consequences can be serious for a seller accused of violating fair housing laws, Johnson explains. “It’s going to cost a significant amount of money to successfully defend yourself in a fair housing action, let alone to be found in violation.”

To avoid a violation, find out where problems are most common.

Where Sellers Face the Most Risk

Potential fair housing violations are subtle and can happen in everyday moments during a sale. Here are situations that can cause problems.

Viewing Potentially Biased Buyer Information

Buyers, especially in competitive markets, sometimes include personal “love letters” with their offers. These letters often reveal details about a family, background or identity to give the buyers an advantage with the seller. When Johnson works with sellers, he advises them not to open the letters. That way, implicit biases can’t affect the decision.

“It also keeps emotions out of it, and it allows us to focus on the dollars and cents and the realities of the terms of the offer,” he says. “At the end of the day, that’s what really matters anyway.”

Researching buyers also causes risk, says Natalie Davis, director of community growth and founder of The Evolution Group with Keller Williams in Loveland, Colo. “Anything that is going to give the seller additional knowledge or insight about the buyer’s personal demographic is starting to step into a space [that could] potentially violate fair housing laws.”

Expressing Preferences About Potential Buyers

“If a seller finds themselves making statements that allude to the fact that they would like to have a particular type of buyer purchase their home, they could unintentionally violate fair housing laws,” Davis says. However, the bar is fairly high to prove a seller intended to discriminate against a buyer based on a protected class.

Using Problematic Language in Listings

Listing descriptions can also lead to discrimination issues. The best course of action is to stick to factual property details. “When we describe the property, that really puts us in the best position,” Johnson says. “When we start to talk about the type of person that’s going to live there, we risk alienating some folks.”

Applying Rules Inconsistently

Sellers should treat every potential buyer the same way. Showings, for example, can generate problems. If a seller says they don’t want showings before 10 a.m., they should apply that rule across the board. “As soon as you make exceptions, that’s when you show that you’ve created different treatment for people,” Johnson says. If those differences align with a protected characteristic, even unintentionally, they can become a fair housing issue.

Focus on the Transaction and Facts

“The seller, every step of the way, should maintain focus on the home, not on the perspective of potential buyers,” Davis says.

Doing that requires:

• Evaluating offers based on objective terms 
• Avoiding personal details about buyers
• Using neutral, property-focused language
• Applying consistent policies to every buyer

Working With the Right Agent Matters

While sellers are responsible for compliance, working with a knowledgeable agent is an effective way to avoid mistakes.

It’s important for sellers to ensure that their agent understands their obligations under the Fair Housing Act and is committed to treating each customer with the same level of care, concern and service. Agents should incorporate an equal service model every step of the way, Davis says.

She recommends asking direct questions before hiring an agent, including:

• What fair housing training do you have?
• How do you uphold fair housing laws in your work?
• How will you guide me through high-risk events like multiple offers?

Two hours of fair housing training are required for all members of the National Association of REALTORS®, and many state associations also require training. Sellers should ask real estate agents, even those with substantial training, how they apply that knowledge in real situations, Davis advises.

Fair housing is consumer protection. It’s a responsibility that shapes how your home is marketed and sold. Most fair housing violations are avoidable, but avoidance requires awareness, consistency and the right guidance.

Nicole Slaughter Graham is a contributing editor for REALTOR® News. She oversees the Brokers, Technology and Home & Design sections. Slaughter Graham also managers NAR’s YPN Lounge, a blog written by YPN members. She can be reached at ngraham@nar.realtor.

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