Pictured home: 16-1949 King Kamehameha Blvd. Kurtistown, HI 96760
Well, there’s a topic my family knows something about but that’s not what this is about. When it comes to real estate, the meaning of “Fair” takes on an entirely different meaning. “Fair Housing” rules have been in place at the federal level since 1968. The Federal Fair Housing Act along with the Civil Rights Act of 1866 dictate that those involved in the business of selling or renting residential properties (even vacant land meant for residential use) may not discriminate based on race, color, sex, religion, handicap, familial status, or national origin. Even though I feel Hawai`i embraces people across the spectrum, the State of Hawai`i expanded this list to include HIV, marital status, parental status, or using a service animal.
Remember, there are always exceptions and the biggest being that if you live on the property, you can be pickier about your choice of tenant, but rental and sales agents must adhere to the restrictions spelled out in the law.
Among the nuances, we aren’t supposed to direct buyers to a particular school district. Instead, we should direct buyers to third-party resources such as GreatSchools.org. We might even suggest speaking to other parents and possibly visit the school. At times, agents may express their preference about a certain neighborhood.
Good vs. Bad
As far as I’m concerned, we don’t really have any “bad” neighborhoods on Hawai’i Island but when a buyer says they want a “safe” or “good” neighborhood, we should instead direct them to the local police dept. Because our police blotter is in the paper each day, it is fairly easy to see that many arrests are other than property crimes although, if you make it easy for them, thieves will take advantage regardless.
Steering, Blockbusting, and Redlining
Directing a buyer to a neighborhood based on (especially) ethnicity would be an example of “steering.” “Blockbusting” is the practice of encouraging sellers to sell because something adverse that “is about to happen” could affect value. This practice is often profit-motivated and encouraged by developers trying to deflate value prior to their purchase. Another practice that sometimes occurs is “redlining.” This normally happens when a lender refuses to lend in a certain area due to ethnic makeup.
A recent article in our Accredited Buyer’s Representative (ABR) Newsletter** cautions us about encouraging buyers to do “Love Letters” to sellers. With inventory so tight, it’s common for buyers to write a personal note to plead their case as the perfect buyer. The trouble is that personal information (especially photos) might lead to claims of discrimination. It could cause a seller to consider one offer over another regardless of the merits of the offer. It’s even possible that a “love letter” could backfire on a buyer.
ABR recommends that agents focus on the merits of the offer. Making the price and terms attractive to the seller is really the perfect “love letter” in my mind!
To Be Fair
So, whether you are buying or selling, remember, when you speak to your agent there may be a reason that they can’t (for example) include your prized school district in any information about the house. We want to be as helpful as possible but when it comes to fair housing and/or discrimination of any kind, there are strict rules and serious consequences related to what we can and cannot say or do!