We looked at a house yesterday in Las Vegas. We’re loosely motivated buyers, so we didn’t waste an agent’s time. But we have this idea that we might buy a distinctive home in a choice location, trick it out in every possible way, then own it as a getaway vacation rental that we will rent ourselves from time to time, when we’re in town. We were looking yesterday in the allegedly ‘historic’ neighborhood of Downtown Las Vegas, which makes the historic neighborhoods of Phoenix look positively ancient.
Anyway, here’s what’s important in the present context: The lister of the home happened to be there as we drove by, and she offered to show it to us. She was eager and energetic, well-informed and enthusiastic, everything you might want in a Realtor, either as a broker or a seller. Except that in the course of about ten minutes, she committed at least two Federal Fair Housing law violations – religion and family status.
We can give the lady a break, I suppose. We weren’t offended, and I can’t image that even members of the two protected classes would have been offended. She was trying to be inclusive, even if unlawfully, not exclusive. All she really wanted to do was get the house sold, so she gave us information she thought we would want, even though doing so was in violation of the law, even though we had disclosed to her our status as Realtors from out of state, even though she should have known we would hear every violation of the law.
As it happens, we are very, very careful about this stuff. Not because we believe all people are individuals, equal in every metaphysical respect. Not because we find prejudice and exclusion abhorrent, repulsive, nauseating. Not because we want to spread the social, emotional and financial benefits of homeownership as far and as wide as possible. We uphold every one of those noble ideals. But here is the reason we are so serious about Fair Housing laws: Because the fines at the Federal level are $11,000 – per violation. Add to that state, county and municipal penalties, and, before you know it, you’re talking real money.
All that relates back to the idea of legal exposure for real estate web sites. The trouble with limiting your contact with your client, even if this enables you to work very cheaply, is that you have no idea what your client might be saying or doing when you’re not around. The policy of all sane Realtors, when they come into contact with a potential client who is xenophobic in any way at all, is to run away as fast as possible. You may not be held liable if your client violates Fair Housing laws behind your back, but if it was in your power to discover that he might, and you did nothing to prevent the violation, you risk hearing a gavel pounding down your net worth. Even if you did properly counsel that client, liability runs uphill to the deeper pockets. This may not be just in some idealized universe, but it is the reality we live in now.
I think the essence of agency is first-hand knowledge of the principal. But even allowing that this knowledge might be graduated down to something approaching zero, if you know so little about your client that you don’t know whether or not he might willfully violate the Fair Housing laws, I think you’re begging to penalized in huge amounts.
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