Sunday, January 29, 2006

Fascism in Real Estate

Today I went to a continued education class for real estate. I worked as a realtor, didn't like the job, but I'm going into referral mode so that if I refer someone to a realtor and they close a deal, I get a cut from the commission. Even to go into "referral mode," I have to take 12 hours of continued education every other year. It amounts to 4 classes that are all 3 hours in length.
The class I took today was particularly disturbing. We were talking about Federal Fair Housing laws and it is unbelievable what realtors, builders, developers, landlords and other real estate pros can get in trouble for, all in the name of HUD fighting discrimination.
Let's start with advertising. You can't mention if a home is near a church, synagogue, temple, for it could be viewed as imposing religion. You can't use words like "empty nesters" because that could be considered steering (sending people towards or away from a certain area). Real estate professionals can get in trouble if they talk about the ethnicity of an area, the crime rate, or the school districts. You can't tell a potential buyer whether a school district is good or not. All these examples could be taken as discrimination and could result in punishment.
Imagine this scenario. A realtor takes a couple to a nice part of town and doesn't lock his car. Then he takes the couple to a rougher part of town and he locks his car. That realtor could be in violation of Federal Fair Housing Rules.
Say a builder is developing a subdivision. In the past, some builders would post pictures of people that live in the new development so potential buyers could see who's living in the area. You can't do that anymore, it could be discriminatory. Those are just a few regulation examples and there are hundreds more.
What's worse is that the government actually sends "testers" to see if realtors, in particular, are violating rules. They can pop into real estate offices, call real estate offices, show up at open houses, and even disguise themselves as a possible buyer just to see if any violations are being committed. In fact, they can go as far as writing a sales contract on a house. So potentially, a "tester" could have you show them numerous houses and get the realtor thinking that they're working for a client. In the end, they're being monitored to see if any act of discrimination has been committed. Plus, that realtor won't get paid, since they don't make a dime unless a deal closes, and they've wasted time that could have spent with a person that actually was looking for a house.
This type of government intervention is pure fascism. It's not running real estate but it's essentially telling the industry what it can and can't do. Realtors, if they commit enough violations, can face a first-time fine of $10,000, the $25,000 for a second offense, third time, you lose your license and you're out of business. They have to build up a fair amount of evidence against you but the fact that government officials are tracking your business is rather daunting.
Now I understand that discrimination occurs too much and I don't condone it in any way, shape or form. It's a sad fact of life that there are racist, sexist people out there and this type of behavior is inexcusable.
Unfortunately, like in so many industries, people turn to the government to solve their problems. And doing what it does best, the federal government abuses that power. The extent of their involvement in real estate is staggering, downright frightening, and simply wrong. Real estate pros have to watch every little word they say or they may have HUD, and in some cases the Justice Department, coming after them.
I'm curious if anyone in real estate has ever sued the federal government for meddling in their business. This type of intervention is absolutely uncalled for and makes me realize how much power the federal government has over business.

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