How Government Regulations Are Impacting Realtors Ability to Survive
Whether you are a seasoned real estate professional or a newcomer to the industry, it is crucial to monitor governmental rules and regulations changes to avoid antitrust issues like those that led to the NAR Lawsuit. These frequently have a significant impact on your capacity for survival. This is particularly valid if you work in the housing sector.
The National Association of Realtors, or NAR, is a powerful trade association representing nearly 1.5 million members. However, many rules and regulations limit competition and keep new entrants from entering the business. In addition, they prevent consumers from knowing the costs of commissions.
Real estate steering is a practice that affects both home buyers and sellers. Steering occurs when real estate agents direct prospective buyers to certain neighborhoods or communities. This can be done consciously or subconsciously. It can be based on race, religion, ethnicity, sexual orientation, criminal activity, or other protected categories.
Steering in real estate is illegal. A civil monetary fine or an administrative complaint can punish it. Violators can face revocation of their license or ban from the NAR.
In addition to the legal consequences of steering, real estate agents can be held responsible for punitive damages. These damages can range from a few thousand dollars to several hundred thousand.
The new coronavirus disease 2019, COVID-19, has hit the real estate industry hard. This viral outbreak has left vacant offices, shopping malls, and flats in metropolitan areas. It has also caused a significant drop in property sales and foreclosures.
Despite this setback, the real estate community appears well-advised to look to the future. The industry is responding with technology-driven strategies allowing agents and buyers alike to abide by health and safety standards, from conducting inspections to providing a walkthrough.
Real estate companies have taken some of the more innovative initiatives, which has seen a nearly 494% increase in video home tour requests in March. Others are making a more practical attempt by hosting open houses on Facebook Live and using masked and gloved notaries to sign off on buyer’s contracts.
While the pandemic has hugely impacted the housing industry, the real estate market’s recovery depends on more fundamental factors. These include the government’s willingness to invest in additional stimulus packages and the severity of any future waves of the virus.
Fair Housing Act
The Fair Housing Act is a law that prohibits discrimination against people in real estate transactions. It protects against discrimination from lenders, brokers, and real estate agents.
So will realtors become extinct? Real estate professionals need to be familiar with fair housing laws. If they are not, they may be violating federal law. Whether the violation is intentional or not, it is a form of discrimination, and you should report it.
The Fair Housing Act prevents housing providers from discriminating based on race, gender, religion, or handicap. The law prohibits other categories of discrimination.
A typical white family held ten times as much wealth in 2017 as a black family. This is a shocking disparity. However, the racial wealth gap has not changed since 1968.
In addition to the Fair Housing Act, other laws protect those victims of discrimination. For example, state laws protect against discrimination against people who are receiving government assistance, as well as against people with disabilities.
Redlining is a type of discrimination in the real estate industry. It occurs when a targeted group is denied access to mortgage loans. The term has become shorthand for some historic race-based exclusionary tactics used in the real estate industry.
Lenders used these maps to determine which neighborhoods were the riskiest. Houses in these neighborhoods held little value as collateral, and residents could not afford to maintain them.
While the practice has been outlawed since 1968, racial covenants have prevented Black residents from buying homes. This has been a detriment to families of color for generations.
A recent study examining the legacy of historic redlining found that, while the practice has been outlawed, the consequences of it remain. Low-income and minority communities suffer from lower wealth, greater poverty, and reduced life expectancy.