What Is Steering in Real Estate? Complete Guide for Buyers and Agents

If you are involved in buying or selling property, you may have heard the term What Is Steering in Real Estate, but you might not fully understand its meaning and implications. Understanding this practice is essential for buyers, sellers, investors, and real estate professionals. In this comprehensive guide, we explain What Is Steering in Real Estate, why it is illegal, how it affects communities, examples of steering, and how to prevent it.

We will also explore the role of virtual assistants in maintaining fair housing compliance and real estate ethics. By reading this guide, you’ll learn how What Is Steering in Real Estate impacts buyer rights, neighborhood diversity, and the housing market, and how to ensure an ethical and compliant property experience.

Understanding What Is Steering in Real Estate

What Is Steering in Real Estate? At its core, steering is the practice where a real estate agent or broker guides or limits a buyer’s housing options based on protected characteristics under federal law, such as race, religion, gender, familial status, or national origin. Steering is considered illegal because it constitutes housing discrimination.

Protected Classes Under Fair Housing Laws

When discussing What Is Steering in Real Estate, it is important to understand the protected classes:

• Race
• Color
• Religion
• Sex or Gender
• Familial Status (children in the household)
• National Origin
• Disability

If an agent directs certain buyers to specific neighborhoods or properties based on these characteristics, it constitutes illegal steering and is a violation of the Fair Housing Act. Even well-intentioned guidance can become unlawful if it limits choices unfairly.

History of Steering

The concept of steering emerged in the United States during the 1960s civil rights movement. The Fair Housing Act of 1968 was enacted to prevent redlining, blockbusting, and steering practices. Understanding What Is Steering in Real Estate helps agents avoid legal violations while ensuring ethical conduct. For more information on fair housing protections, visit HUD’s Fair Housing Overview.

Why Steering Is Illegal

Steering is illegal because it restricts a person’s freedom to choose where to live based on irrelevant personal characteristics. The Fair Housing Act prohibits steering as it contributes to segregation and unequal access to housing. By understanding What Is Steering in Real Estate, agents can maintain compliance with federal and local laws while protecting buyer rights.

Equal Access to Housing

Fair housing laws are designed to ensure that all buyers have equal access to housing opportunities. Steering undermines this by segregating neighborhoods and reducing community diversity. Buyers affected by steering may find fewer options, which limits their ability to choose properties based on personal preferences rather than assumptions made by agents.

Real Estate Ethics and Compliance

Understanding What Is Steering in Real Estate is not only about legal compliance but also about maintaining high standards of real estate ethics. Agents are expected to provide clients with unbiased property options based on budget, desired features, and actual needs, rather than assumptions about race, religion, or family status. Failing to comply can result in legal penalties and damage to reputation.

Case Studies Highlighting Illegal Steering

Studies from HUD and the Urban Institute indicate that minority buyers are often shown fewer properties than their peers and may be directed toward specific neighborhoods based on demographics. Even subtle steering can significantly affect long-term wealth-building opportunities, perpetuate economic inequality, and limit access to quality schools, jobs, and community resources. For detailed research, see Urban Institute.

Examples of Steering in Real Estate

To better understand What Is Steering in Real Estate, consider these real-life scenarios:

• A Black family is advised to consider neighborhoods with more minority residents instead of their preferred area.
• Families of a specific religion are shown homes only near particular places of worship.
• A buyer asks for a “safe” neighborhood, and the agent excludes areas based on demographics rather than actual crime statistics.

These examples illustrate how steering influences buyer decisions based on protected characteristics rather than objective facts or actual preferences.

How Steering Affects Buyers and Communities

Steering has widespread consequences for buyers, neighborhoods, and the real estate market.

Limited Housing Options

Minority buyers often face fewer housing choices, which may force them to compromise on budget, size, or other property features.

Continued Segregation

Steering contributes to racial and economic segregation, reducing diversity and limiting social mobility in affected communities.

Economic Impacts

Restricted housing options can lower homeownership rates, limit long-term wealth accumulation, and affect generational economic stability for marginalized groups.

Unequal Access to Resources

Neighborhoods affected by steering may have limited access to high-quality schools, healthcare, employment opportunities, and public services. For more on community impacts, see Brookings Institution.

How to Avoid Steering in Real Estate

Both real estate agents and buyers can take steps to avoid steering and ensure compliance with fair housing laws.

For Real Estate Agents

• Provide listings based on objective criteria: budget, size, features, and buyer preferences.
• Avoid subjective descriptors like “safe” or “nice” without clarifying the client’s meaning.
• Refer clients to third-party neighborhood data sources like NeighborhoodScout or official city demographic reports.
• Maintain records of client communications to demonstrate compliance with fair housing laws and real estate ethics.

For Buyers

• Clearly communicate housing needs and preferences.
• Conduct independent research on neighborhoods to verify agent recommendations.
• Report suspected steering to local authorities through HUD Fair Housing Complaint.

The Role of Real Estate Virtual Assistants

Virtual assistants help real estate agents maintain compliance and reduce the risk of steering.

Responsibilities of VAs

• Objectively manage client property data and listings.
• Track communications and document compliance with fair housing laws.
• Support agents in providing equitable property options and maintaining ethical standards.

Conclusion

Understanding What Is Steering in Real Estate is essential for legal compliance, ethical practice, and protecting buyer rights. Steering is a form of housing discrimination that violates the Fair Housing Act, perpetuates segregation, and limits access to housing opportunities. Real estate agents must adhere to ethical guidelines and provide unbiased property options, while buyers should remain informed and proactive.

Virtual assistants can provide valuable support in promoting fairness, compliance, and objectivity in real estate transactions. By preventing steering, the industry can create inclusive communities and equitable access to housing opportunities.