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July 26, 2009

What a real estate agent can and can't tell you

Ask a real estate agent about schools, and you might get nothing more than a pained smile and a school-information website or two.

"I list homes in a neighborhood that boasts the highest rated schools in the country and I can't even say it!!!" one Virginia agent wrote on Trulia, in response to a frustrated buyer who wants to know why Realtors won't "answer questions regarding where the best schools are" near Bel Air.

Agents are afraid they're going to get into trouble with the federal Fair Housing Act, that's why. The law aims to stop housing discrimination, including the steering of people to or away from neighborhoods based on factors like race, gender and religion.

The National Fair Housing Alliance, putting agents to the test during the housing boom, filed complaints against real estate companies for allegedly telling white clients -- but not minority clients -- to avoid certain neighborhoods because of the schools.

"'Good schools’ and ‘bad schools’ are the new code words used by some real estate agents to discourage Whites from considering integrated neighborhoods," the alliance said in a 2006 press release.

Such testing -- and federal-complaint-filing -- has not gone unnoticed by agents. When I interviewed Realtors for today's story about the impact of school test scores on such non-classroom matters as home values, there was some squirming over the phone line.

One agent wouldn't even say on the record what school districts parents were often asking him to show them homes in, even though it was their request and not his suggestion. Another agent said he's pressed by out-of-town clients to tell them which schools are good, but he's not about to do it because they could be testers for all he knows.

I wondered what agents really can say on the subject of schools. So I asked John Trasviña, assistant secretary for fair housing and equal opportunity at the U.S. Department of Housing and Urban Development.

Are agents prevented from telling clients objective facts such as test scores?

"There's a different way of looking at it that I think will be a more broad answer to your question, and that is that real estate agents ought to share information with clients on an even-handed basis,"Trasviña said. "The question isn't what can they say, but whether they say is said to everybody."

He added: "If a real estate agent is only saying to white prospective renters or owners, 'Oh, you don't want to look over in that area, the schools are terrible,' that would be a problem. But if they told everyone, 'Here are the test scores over here, here are the test scores over there,' that would be appropriate. That would not be a violation of the law. And the same would be true on crime data."

So, agents, you can talk about test scores. Whether you can say "the schools in that neighborhood are terrible" as long as you say that to everyone -- well, that's apparently not so clear-cut.

"I can't give you a blanket assurance one way or another," Trasviña said. "But if an agent says 'schools in this area are terrible,' they're probably not going to do much business in that area. They can restrict their business to a certain community as long as they are treating everybody the same."

What's handy about the Internet, Trasviña said, is that agents can put school information on their websites and then by definition are telling everyone the same thing.

(Got a question or complaint related to the fair-housing law? Trasviña says to call HUD's housing discrimination hot line at 800-669-9777.)

Dominic Cantalupo, an associate broker at Champion Realty in Pasadena, noted something last week that gets forgotten in all the angst about whether agents can reveal test scores: You can't necessarily tell what a school is like from its stats. Or whether it will be a good fit for your children.

"I say, 'If it's really important to you, my advice would be to seek out some folks and talk to people living in the neighborhood already,'" he said.

Comments

He says: "If it's really important to you... seek out some folks and talk to people living in the neighborhood already,"

I say: Personal anecdotes are sketchy at best and really shouldn't be depended on for more than "background" when reading the objective statistical data.

Whether you have school age kids or not every owner in the neighborhood is directly affected by the reputation of the schools nearby. But if you do have school age kids then it is doubly important to know for sure.

Back to the bucks: The "extra" ($10,000, $20,000?) that the retired couple down the street want to get when they sell has to come from somewhere. It might be a justified premium... it might not be.

Do your homework. Caveat Emptor.

This is a good post Jamie!
There are other "fair housing" cautions as well, such as proximity to houses of worship, accessibility for those with disabilities and whether or not a neighborhood has children.

I agree, this is a very good post. It also does remind us all that even though we live in a progressive world...

... a white neighborhood is worth more than a non-white neighborhood (all else equal). This is pretty ingrained in the BatlDC metro areas. Some older neighborhoods even had HOAs that had 'whites only' causes in the founding documents (since removed) but, the underlying theme remains in those places to this day (90+% white).

I'm not trying to invoke a social/political discussion but, I do have some sympathy for Realtors (a rarity) for having to navigate though some of these non-PC issues.

:/

Ditto the remarks about good post. While there are some aspects of house-hunting that I expect a realtor to know, I honestly don't believe that the realtor should be responsible for telling me every single detail about a particular neighborhood. I don't expect any realtor--particularly in a urban market--to know the details of a neighborhood to the level that I know my own neighborhood. It's not practical, or possible! I expect my realtor to do a competent job at what they do--which is to sell properties (the most stripped-down definition).

Regarding anecdotes from residents, I have to side with MrRational. The only time that I selected a dwelling based on the anecdotal info from other residents in the neighborhood turned out to be a lemon of a rental property. I think it's important to meet potential neighbors when house-hunting, but never take the information received as gospel. Get to know a neighborhood by actually spending time in that neighborhood. Go to the local businesses (if there are any). Try your commute from the potential neighborhood to see what traffic is like. Is the neighborhood pedestrian/bicycle/outdoor friendly, if this is something that you require? Good public transportation? Etcetera, etcetera. I know that this isn't always possible due to the nature of some moves, but it's worked well for us when we've been able to take the time.

More than anything, this highlights yet another perverse effect of the overhyped MSA test scores. It has been a well-established fact for over 30 years that a school's test scores have almost everything to do with the income, wealth, and color of the parents, and almost nothing to do with what goes on in the school. Sure, Howard County kids are dancing in the endzone while Balto City kids are struggling at the 50 yard line, but that doesn't have much to do with school quality considering that Howard County kids start out with a 50 yard lead. So published test scores are serving to grease the market mechanism that separates the haves on one side of the tracks from the have-nots on the other. It's good to see the feds have taken note. Let's hope the next act of congress is the cancel the horrible No Child Left Behind law that contributes to this sorry state of affairs.

Season_ticket:

So I'm a have. Do you actually expect me to put my kids among students that can't hardly read and pay double the taxes to subsidize everyone else while putting up with criticisms about my success?

The more that people blame wealthy people for leaving the more they will leave.

"Little Debbie",

For a "have", you obviously didn't get the education you likely feel you deserve. Before you go bragging about being a "have", you might want to double check your use of grammar and punctuation.

Grow up "Fed up"

Are you shooting the messenger because the message bothers you?

I agree with Little Debbie's comments. This is a touchy issue. Every parent that is actively involved in raising their children wants them to be safe and will pay extra for it if need be. Their are certain measurables that everyone uses to assess if a school is safe. These numbers usually put you in the ball park of determining good and bad schools.

I would be interested to hear an example of when a great schools assessment has led to dissapointing results.

Yawn. I think Realtors need to wisen up a little bit. Their own .com site has a school reports link. They can refer folks there to make comparisons. The same .com (at least used to) also provides a 3rd-party greatschools.net "score." Realtors need make no reference to good schools or bad schools, just to sites where people can make their own judgments based on the data and reviews. From there, if a buyer asks to see only homes within certain school districts, what trouble would an agent be in by showing only the homes in which their clients are interested in seeing?

Let's be honest, buyers should be doing the research, not begging for that kind of advice from a real estate agent. There's nothing stopping a buyer from asking prospective neighbors about the schools.

School Reports: http://www.homefair.com/real-estate/school-reports/index.asp

3rd party scores: http://www.greatschools.net

Realtors should be, but are NOT in business of putting you in the home that fits you best. They simply want to have you pay the highest price possible, as quickly as possible.

Little Debbie: You can choose to live wherever you like, even if it is socially harmful for people to be so segregated (in my opinion). My point is that I don't necessarily want my tax dollars feeding you the information to make this choice easier for you, based on tests of limited educational value (again, my opinion).

I agree with Darwin Rules. In theory the buyers agent should be serving the buyer's interest.

Yes, the buyer has to do the research, but this might be rather difficult for those of us who are moving to the new area, are first-time buyers or, oh, have a full-time job and a baby. A well-priced home in a good neighborhood in MD will be sold while you're talking to the neighbors.

I personally don't care about the racial profile of the area (don't people of all races want their children to be safe and well-educated?), but I think it's ridiculous that a realtor can't point out to the client that certain area might be undesirable, based on the clients preferences. I would much rather get information from a trained professional than from the random strangers.

Just to clarify... giving advice about schools is like giving advice about commutes or crime. It's a personal judgement call. Husbands and wives disagree on what is a good school and what is a safe neighborhood, what is too close or too far from work. As a REALTOR, I don't want to get into that. I do provide ideas on where else clients can get information. AND, with fair housing - remember that the accused must prove their innocense, not the other way around... so if I am accused of steering, it will be my problem. It can be very expensive to defend yourself against these allegations....EVEN if there is no evidence of such actions. So, some of us simply "steer clear" - can you blame us?

One way to solve this might be to find a way of making the information available independently of realtors, a 3rd party source that realtors can reference. Ah, I see Pete has already mentioned this. At any rate, such limitations that arise in the moment, do make the Fair Housing Act quite frustrating.

dyeah......as an estate agent I agree with your comments, a good agent should make use of the resources available on their website.

Surely this is the logical way for an agent to deal with these types of issues without putting themselves at risk of repercussions, and still provide their client with credible information.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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