Fair Housing
A Kentucky real estate agent completes a market analysis and discovers that houses sell for significantly less in racially diverse neighborhoods. The agent should:
ADisclose this to clients as a material fact affecting value
BNot use this analysis when working with clients to avoid steering✓ Correct
CReport this to HUD as evidence of systemic discrimination
DAdvise clients to avoid those neighborhoods for investment
Explanation
Using racial composition of neighborhoods as a factor in determining or advising on property values or investment potential could constitute illegal steering. Fair housing laws prohibit directing clients based on the racial composition of neighborhoods.
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Key Terms to Know
Steering
An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Fair Housing ActFederal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
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