MAY 2021
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OFFICIAL MONTHLY NEWSLETTER FOR SAN ANTONIO AREA REALTORS ®
Legal & Ethics
IN THIS ISSUE: • Multiple Offers and Fair Housing • Legal & Ethics: Fair Housing • March Home Sales Setting the Pace for Summer • Upcoming Board Events • Welcome New Affiliate Members
• Sign Up for 2022 Committees with Texas REALTORS® • Olé 5k for TREPAC • Thank You to Our SABOR Advertisers
Multiple Offers and Fair Housing Homes are selling faster than ever, and the low inventory is causing buyers to compete for a limited number of homes available. This increased demand and quick-moving market can often result in multiple offers coming in on a property. While the idea of a bidding war may sound desirable to some sellers, there are a few crucial principles to know to help your clients stay focused and avoid legal trouble. • Watch for potential fair housing red flags. Heartfelt letters to sellers, sometimes called “buyer love letters,” can open doors to potential fair housing violations. These letters can often include personal information that leads to a prohibited basis for prejudice. Many times, in trying to convince the seller to accept their offer, the buyer will reveal characteristics about themselves such as race, religion, or familial status. To avoid a fair housing violation, a seller should not accept or reject offers based on the characteristics of a buyer but rather the decision to reject or accept an offer should be based on objective criteria. It is a best practice to make sure to document all offers received by the seller along with the objective reasoning for acceptance or rejection of the offer. • Explain options and alternatives to your clients. The REALTOR® Code of Ethics requires REALTORS® to “protect and promote the interest of their client” in multiple offer situations and also denotes that, “REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.” Prepare your
clients that these offers will likely come in fast and advise them on their available options. For example, sellers can accept what they deem to be the “best” offer and reject all others, or they can also invite all potential purchasers to make their “best” and final offer. Sellers may also choose to counter a selected offer while holding other offers to the side as they await a decision on their counteroffer. Keep in mind that every approach has its advantages and disadvantages. • Know that there are no guarantees. Inviting buyers to make their “best” offers may produce an offer (or offers) better than those “on the table.” But this tactic may also discourage buyers who feel they have already made a fair offer resulting in them breaking off negotiations to pursue other properties. Make sure you are communicating regularly with your clients so they have the expert guidance they need to navigate this process. While it can be exciting for a seller to have so much interest in their property, it is important they know their options and are aware of potential fair housing violations.
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Fair Housing The Fair Housing Act, passed in 1968, codifies the idea of equal housing opportunities for all people and further makes it illegal to discriminate based on race, color, national origin, family status, disability, or religion. REALTORS® support the idea that everyone should have access to housing. The ideal of equal access to housing has become part of the fabric of our real estate market and is embodied within the Code of Ethics which all REALTORS® adhere to. NAR even amended the Code of Ethics in 2010 and 2013 to include updates supporting equal opportunity on the basis of sexual orientation and gender identity. As a REALTOR®, you may have been in the situation where a seller tells you that they do not want to sell their property to a person of a particular race, or a property owner tells you that they do not want to rent to people with a disability. Perhaps your client wants to see a particular home in an area of town, and you feel impressed to let them know that you don’t think they would be comfortable in an area because of their religious affiliations. In each of these situations you may feel an obligation to comply with your client’s desires and do what they want. You may also feel that your actions are necessary to act in accordance with your client’s best interests, but you would be wrong. Each of these actions would be in violation of Federal Fair Housing Laws. Home buyers have the right to have housing available to them without discrimination or other limitations predicated on race, color, religion, sex, handicap, familial status or national origin. Federal law prohibits discrimination in the sale, rental and financing of property on the basis of race, color, religion, sex, handicap, familial status, or national origin. Additionally, some states and local municipalities prohibit discrimination against a person on the basis of sexual orientation. Article 10 of the REALTOR® Code of Ethics also prohibits REALTORS® from engaging in any plan or agreement to discriminate against a person on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. In a situation where you are asked to engage in discriminatory behavior by a home seller or landlord, you cannot comply with such a request. One way to avoid finding yourself in violation of the law and the REALTOR® Code of Ethics is to educate your clients on Fair Housing Laws and your ethical obligations at the beginning of your relationship. You should also set the expectation with them that you will not engage in any discriminatory behavior. These practices could help you avoid finding yourself involved in an investigation and/ or lawsuit. To help with REALTOR® education related to Fair Housing, NAR has recently released the Fairhaven program. Fairhaven is an interactive program that places users in different real-world scenarios to educate REALTORS® about Fair Housing laws. It’s a great resource and can be found on NAR’s website. If you suspect that your client is the victim of such discrimination, you should contact SABOR, Texas REALTORS®, and/or the United States Department of Housing and Urban Development to bring such issues to their attention.
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