What Does It Take To Be An Ethical Real Estate Agent in Today’s Market?

/ /
Being an ethical real estate agent means doing more than attending your local Code of Ethics class by your local REALTORS Association. The recent Long Island study conducted by Newsday revealed in stunning videos that a large percentage of REALTORS purposely discriminating against 49% of test home buyers and sellers who are African American. Meanwhile, a month after the report came out the best response we are getting from our real estate leadership is "We offer free ethics training" or "This is a local issue" and my favorite "This issue is close to my heart and we are hiring a committee."

Being an Ethical Real Estate Agent in today’s world goes beyond attending your REALTOR Code of Ethics classes taught by mostly white trainers.  It requires us to do the hard work of educating ourselves about implicit bias. Leaning in on the tough conversations with our leadership, hiring and supporting people of color agents and managers, and personally committing to working with 2-3 first-generation homebuyers whose families have been locked out of the real estate market because of our historical racist actions as REALTORS. And if we do not commit to doing this work and doing this NOW (not tomorrow, next month, next year, etc..) we risk being the wedge that industry disrupters need to replace REALTORS (look at the history of the Taxi industry.)

The days of waiting for “leadership” to take action on being an ethical real estate agent means being a bystander in our own business. Let’s be honest, the National Association of REALTORS (NAR) is stuck taking commands from local volunteers mostly white leadership on this issue. Many of these “leaders” have documented extremist views on people of color and trans people (see below). Those in leadership have no motivation to change the behaviors or the standards in this industry because it serves the industry to keep a white majority. If you really want to do the good work of rectifying years of discrimination you have to make sacrifices. As a result, the “I don’t see color” REALTOR rhetoric will stay the norm.

The following blog is for those of us who yearn for change and are motivated to do the work of being an ethical real estate agent. We understand that if we do not change we risk becoming obsolete by disrupters who they themselves are more diverse and appeal to younger homebuyers and sellers.

Background: Newsday  Revealed Racial Bias In Real Estate in Shocking Detail

Newsday recently published the results of a three-year investigation into race-based discrimination in the real estate industry. In all, 93 real estate brokers representing twelve brands serving Long Island were tested. And the results were not promising. The rate of discriminatory practices also varied significantly between ethnicity.

Discrimination was observed 49% of the time with black testers, 39% with Hispanic testers, and 19% of the time with Asian testers.

What is most disturbing about the investigation is that the minority clients didn’t know they were being treated unfairly. The agents were all smiles and handshakes. Seemingly conducting business as usual. But as the testers learned at the end of the study, the agents offered a very different experience for white clients.

One agent outright told one of the Black tester “buyers”, that she would not show her any homes until she was pre-approved. The same agent, when meeting with a white woman, also a tester buyer, asked her how soon she would be able to go out and tour homes, even though she also was not pre-approved.

It’s clear we have a problem.

Tony Arko, a Former President of His Local REALTOR Association, is The Perfect Example of Why REALTOR Associations Cannot Police Themselves on Racist Tactics

Tony Arko is a Virginia based real estate agent who is a past President and Chairman of the Board for his local Association of REALTORS. That means he was the person making the rules around enforcing the REALTOR Code of Ethics at the Association level. And that’s a problem because Arko said outright in public Facebook comments: “99.9% of all people prefer their own race. Not discrimination, fact.”

Let’s not mince words: It is ILLEGAL to discriminate against people in real estate because of their race. PERIOD. It’s been illegal at the federal level for fifty years now. Unfortunately having a racist mindset does not get you into trouble with the REALTOR Associations. You have to prove someone did not get housing as a result of the actions of the REALTOR. And if you remember, none of the people of color in the Newsday investigation had any idea they were being treated differently than their white counterparts.

Why We Cannot Police Ourselves On This Issue

  • The people responsible for enacting fair housing are the state and the local REALTOR associations.
  • The local REALTOR associations have people like Arko on their boards.
  • The local REALTOR associations will not enforce their own code of ethics UNLESS you can prove that someone was denied housing.

Hence, Arko knows he can get away with blatant racism (and an apparent bias against LGBT folks) because he and his friends are in charge. And no one can prove that someone was denied housing based on his racist remarks. Not like Newsday just did, anyhow. In addition, Arko also added some awful comments about Trans people and their “sympathizers.”

The bottom line is that people who discriminate against people of color will go the next step and attack our clients. Our community has felt firsthand the impact of what white nationalists are willing to do to preserve their white culture. Bad news for them. This does not bode well in terms of preserving their business long-term.

Diva Dwellers Hit By Hate Groups During Pride Month: It’s Time to Fight Back

The Taxi Industry: A Warning to the Real Estate Industry

Well-known incidents of racism by the taxi industry gave consumers all the reasons they need to go to ride-sharing apps. For years we never took a Taxi because we lived in a more diverse neighborhood and knew they would not pick us up from our house. As soon as Uber came along, it all changed. And again, this isn’t a local issue. In Chicago, the “Hailing While Black” poll found that 62 percent of black Chicagoans and 55 percent of white Chicagoans believe minority communities are discriminated against by taxi service providers.

And now the taxi industry is imperiled. And no one is really mad about it, aside from the drivers.

The same can happen in the real estate industry. Brands and the agents aligned with them have to take a stand and commit to undoing bias. Right now, Redfin is one of the few companies in real estate that has MANDATORY unconscious bias training. They understand that the next generation will avoid unethical businesses as best they can. Real estate brokers who do not take this seriously now will be unwanted and obsolete in due time.

Team Diva Appealed to the Higher Nature of the Real Estate Industry. Reached Out Personally to Leaders. Published an Article with Inman News, and Got Nowhere

 

We published a detailed response to the Newsday article on Inman responding to this study. In it, we breakdown how similar racism was prevalent in the taxi industry. Widespread acknowledgment of racial bias in the taxi industry gave a wedge to ride-sharing apps. That made it all the easier for Uber and more to come in and disrupt an entire industry. We also gave clear details of how our industry can overcome this and do the good work (see below for details).

Meanwhile, since publishing the article this is what has happened.

  • Texted the article to a manager at Coldwell Banker Bain who expressed a desire to take up the work. As of yet, nothing has happened.
  • Detailed conversations were had with two board members on this issue at our local Seattle King County REALTOR Association and they were told by their upper management: “We provide Ethics Classes for Free.”
  • The head of Fair Housing at NAR called Chavi to discuss the issue. Super knowledgeable human being who wants to do good. Unfortunately, the structure at NAR means this is being handled at a local level. Keep reading how these local REALTORS are handling this issue.
  • Communicated to Coldwell Banker leadership and NRT CEO Ryan Gorman. Who said, “This issue is close to his heart.” And sure enough, he is the only person speaking up so far outside of Redfin and a few others.
  • The Long Island REALTORS who were caught discriminating against people of color in refused to show up to testify on their own behalf. No literally – they are BOYCOTTING New York State’s investigation!
  • NRT CEO Ryan Gorman did show up and stated “This process has led me to believe we need to have our own training and to augment state-mandated training. I think what was uncovered in the Newsday investigation was severely disappointing.”

Do we as ethical real estate agents want to be the agents of change or do we want to go the way of the Taxicab companies? Right now it sure looks like we want to burn down our industry to preserve an outdated narrative.

Why Attending a REALTOR Code of Ethics Class is Not Enough to Be an Ethical Real Estate Agent

Throughout this drama, mostly white REALTORS keep responding that the Code of Ethics is there to make sure we as REALTORS do not act like racists f*cks to people of color.

The Realtor Code of Ethics serves a purpose. That purpose is to give REALTORS clear guidelines of behavior to avoid violating the Fair Housing Act. It also gives REALTORS guidelines on how to treat their peers in an ethical manner. The problem is the Code of Ethics does not teach agents about implicit bias.

Being an Ethical Agent Means Knowing and About Implicit Bias and How it Plays Out in Racist Behaviors

Everyone has an unconscious or implicit bias: stereotyped thoughts about certain groups. How they act, how they live, how we expect them to behave, etc. These stereotypes are reinforced by our society, our media and, currently, our President. We’re all familiar with them: Poor people are lazy. Asians are hard working. Black men should be feared. White women are emotional. Gay men are nelly. Mexicans are criminals. White men are rapist college bruhs.

We are raised in a white-run world. White people own most of the wealth and housing in our country. White people control most of the government and industry—real estate included.

Unconscious biases inherent in this system render The Realtor Code of Ethics moot and largely unenforceable.

Those with power are better able to maintain it when such biases are propagated and pervasive. This is why change will NEVER come from the top down. Not from NAR, not from our CEOs. Nor from our local associations. It will ONLY come from you and me and those who are willing to become Ethical Real Estate Agents.

Unconscious Bias and Discriminatory Behaviors Happen Regularly – Even in Liberal Seattle

Article From Seattle Times “As South Seattle gentrifies, white people, become the largest racial group”

The first step to becoming a more ethical real estate agent is understanding that unconscious bias exists everywhere. Even in overwhelmingly “blue” Seattle. Why? Because even our neighborhoods that were once diverse are quickly becoming more white as the city is gentrified.

Marguerite Martin did a blog on LinkedIn on this issue. “87% of real estate agents are white. 98% of the land in the United States is owned by white people.” She goes into detail about how the passive and overt systems we have constructed within this industry ensure that mainly white people are buying homes from other white people. And as the Newsday study uncovered, it can even happen from the start of the transaction. With agents requiring extra steps and qualifications from people of color.

That’s the problem with unconscious bias: It can and often does become implicit racism. We don’t know these agents personally. Some of them may or may not be consciously racist, but that is irrelevant. What is relevant is that their actions were racist. And it’s these small microaggressions, the ones we white people blow off or deny, that often cause more harm than explicit racism. The Newsday results are a perfect example.  We have also seen this sort of situation firsthand in Seattle real estate.

Team Diva Constantly Deals With Other Agents and Their Unconscious Bias While Touring Homes and Doing Business in Seattle

Remington Touring Madrona

Chavi was recently touring with our team member Remington in Madrona. A neighborhood that he tours all the time. Chavi is white; Remington is not. Chavi walked out of one house first and the agent holding the brokers open turned to Remington and said: “Do you even have anyone who can afford to buy this house?” Chavi was appalled. Remington said, “It happens all the time and I just try to ignore it.” 

On another occasion, the Divas decided to check out an Open House while walking in their neighborhood. They have lived in south Seattle for over twenty years specifically because it is one of the few diverse areas in Seattle. The Divas neighborhood is sandwiched between a low-income development, million-dollar waterfront homes, a large Muslim community, and the largest Jewish community in the city. It’s a wonderful cross-section of cultures and experiences. Close to our house, older African American gents get together and BBQ every Sunday in the park. To us, it is part of what makes the fabric of the Divas’ neighborhood great.

To the white agent holding the open the house, it was a detriment to the price. Literally a white woman at the open house expressed how much she liked the home. She asked the agent, who was also white, why the home was priced so low. The home was priced $75,000 less than the recent sale in the area.

The agent replied, “Well, it is ‘hood’ adjacent so…”

All of the diverse beauty of the place that the Divas call home was reduced to a classist (and frankly, racist) jab.

Stories like this are not isolated events. Our team members, Rocky and Remington, who are both men of color, experience these microaggressions regularly. As do our clients of color. As do our neighbors. They have taught themselves to ignore it because…well, who wants to live being angry every day?

These are personal examples of racist tendencies in real estate, but the national response to the Newsday article has proved that they are indeed industry-wide.

Being an Ethical Real Estate Agent Takes Work

“The Most Revolutionary Thing a Person Can Do Is Be Open To Change.”  Hank Willis Thomas

Clearly, this change will not come from the top down in our industry. It is up to all of us to be individual leaders on this issue. Here are some simple steps to help you break through the barriers whether they are personal, professional or societal.

Steps to be How to Be a Modern Ethical Real Estate Agent 

  1. Read White Fragility: Why It’s So Hard For White People To Talk About Racism  – The bottom line is that white people stay within their white cultures. Even if they are LGBTQI. Rarely do we go outside of our comfort zone to truly understand other people and their experiences? The level of denial that we are seeing is a direct result of our fear of accepting and understanding bias. 
  2. Understand and Accept That Unconscious Bias Exist We ALL have unconscious bias. This does not make us inherently bad. It makes us human. But denial keeps us in our comfort zones, where we are free to discriminate without awareness around our biases. Being aware of this bias and “open to change” is a huge step.
  3. Hire and Support Black/Brown Agents and Managers in this Industry Only 4.4% of agents in this industry are African American. African Americans have endured the bulk of housing discrimination throughout history. As a result, they come with less family housing wealth than other communities. Traditional “prospecting your sphere” processes do not work for communities where they may be the first person to graduate college in their family. Getting started in real estate is expensive and it is important to understand not everyone is on an even playing field. 
  4. Lean In On Conversations of Stereotyping and Implicit Bias in Your Office – Once again, white people segregate themselves into their own community. They go to school with mostly white people. They work with mostly white people. A lot of people do not have a REAL friend who is from a different class, culture, or community than themselves. Hear something, say something. People are not going to change because we sit politely minding our own business with our lips firmly shut.
  5. Pressure Our Leadership to Do a Better Job Training Agents Millennials just became the largest generation. They make buying choices that feel ethical and fair. They will not work with people that do not share their value. We are at risk of having disruptors like Redfin and Compass take over market share with this group of home buyers and sellers because we as an industry are incapable of changing our attitudes around race and equity. Redfin cares about housing rights and equality. They have hired more people of color than any other organization. They are 100% committed. Coldwell Banker cannot even put up a Pride Flag in their marketing around the LGBTQ Pride season. 
  6. Be a Rosemary Buerger and Get on the Board at Your Local Association – As soon as the Newsday article came out, North Carolina real estate agent Rosemary Buerger worked with her local association to make sure it was a known issue and that they needed to do something. We need more leaders like Rosemary who understands the big picture and is willing to make waves to save our industry. 
  7. Commit to Helping 2-3 First Generation Homebuyers With their First Homes. The only way we are going to move the tide and increase homeownership with diverse communities is by helping the first generation homebuyer get their first home. There are down payment assistance programs in many states including Washington state. Working through these programs requires a very skilled agent who will take the time to manage the process. Commit yourself to help someone in 2020 purchase a home to pass down to their kids. 

The real estate industry needs to make a commitment to be an ethical environment for all homebuyers and sellers, or they risk going the way of the taxicab industry. We can commit to change. Or change will happen to us through lawsuits, disruption, and distrust by Millenials and Gen Z. And let’s be honest: Facebook was a big change for most REALTORS. Having some hard conversations with ourselves around unconscious bias and racism is going to be tougher. 


Being an Ethical Real Estate Agent is more than attending a Code of Ethics class by your local REALTORS Association. Being an Ethical Real Estate Agent means you understand your unconscious bias. You work to shut down voices of oppression in our REALTOR community. And you do the hard work to preserve and enhance our real estate industry. We do this work or we become a disrupted industry.