Testing Yourself for Hidden Biases in an Age of Housing Inequality

This month, the National Association of Realtors released a 53-minute training video centered around addressing and overcoming hidden biases in the real estate industry. With a tenet of our mission statement being to “grow our student’s knowledge base,” we’re encouraging real estate professionals in Michigan and all over the country to learn about and assess themselves for hidden biases.

A hidden (or implicit) bias is when our brains automatically (and often unconsciously) associate stereotypes with particular groups of people - which can cause us to treat those people differently. Before you watch the training video, try taking an Implicit Bias test to learn what your unconscious attitudes are. Considering your own hidden biases is an uncomfortable process, but a necessary one. Research shows that “despite people’s best intentions and conscious awareness, some biases can persist.”

Some examples of hidden bias statements gathered from real estate agents are:

  • “I am going to show you some homes in ‘your kind of neighborhood.’ ”
  • You don’t want to live in that neighborhood, you can afford to live over here where you’ll feel more comfortable.”

If you can’t watch the entire course right now, here’s one key takeaway:

Bias Override is a way to make sure that your behavior aligns with your values. Integrating this into your real estate practice means:

  • Developing protocols for how to provide all clients with equal treatment
  • Learning how to manage your mindset so your interpersonal interactions with clients are respectful and successful
  • Creating scripts for how to navigate conversations about subjects such as schools to make sure you are conveying the same information to each client

It’s important to ensure that all of your clients can obtain the exact housing they desire. In Michigan, studies show that housing inequality is still prevalent despite 1968’s Fair Housing Act. A 2016 survey found that in Metro Detroit, black applicants were twice as likely to be denied a home loan as white applicants. In Lansing, black applicants fare even worse with a denial rate three times higher than whites.

This week, join in the fight for housing equality by setting aside some time to recognize your own hidden biases and start taking steps to change your way of thinking.

 


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Love Wins in Real Estate

The LGBTQ+ community across the nation celebrated as the U.S Supreme Court ruled that existing federal law forbids job discrimination on the basis of sexual orientation or transgender status. This is a major victory for advocates of gay rights. By formally recognizing LGBT individuals into federal anti-discrimination law, the Court effectively rejected the withholding of rights. The LGBTQ+ movement is determined to gain equality, and this ruling showcases the strides that have been made and the challenges we still face when it comes to discrimination in the U.S.

In a landmark 6-3 decision, the court ruled that employers can’t fire lesbian, gay, or transgender people simply for being who they are. The ruling says Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, religion, national origin, and sex applies to discrimination based on sexual orientation and gender identity. The passing of this ruling and the many more to come will bring change to real estate and fair housing and allow real estate professionals to tap into a much broader demographic than ever before.

Members of the LGBTQ+ community will not have to cherry-pick which state they can live in to own a home and get fair mortgage rates. According to a poll from Iowa State University, same-sex couples were charged .02% to 0.2% more in interest rates, upfront fees, or both on their loans. While to the average eye it doesn’t seem like much, it can add up to hundreds or even thousands of dollars over a 30-year mortgage. That same report shows same-sex couples were 73% more likely to be denied a mortgage than straight couples with similar profiles. “It’s very sad that even in this day and age there’s still discrimination in the mortgage process after all the strides we’ve made," says Tim Hur, a previous diversity chair of the National Association of Realtors®. "Everyone should have the same opportunity to own a home. It doesn't matter if you're gay, lesbian, Asian, black, or Hispanic."

Modern communities are more diverse than ever so why the great divide? Lack of confidence may help explain why LGBTQ+ home ownership rates lag those of America overall. According to the survey, 54% of LGBTQ+ respondents owned homes, compared with the national home ownership rate of 63.8% (which is itself at the lowest point since 1993).

LGBTQ+ who rent, particularly Millennials, have their own concerns, however.

For a generation that many have been deemed “Generation Rent”, the survey said, of LGBT Millennials surveyed, 59% say they plan to have children in the future; having children being a potential motivator for purchasing a home. Housing discrimination is a whopping 73% of the survey's respondents’ strongest concerns, whether they wanted to buy or rent. Choosing where to live is the first step in the path to home ownership and immediately we see the importance of being in an accepting and welcoming community. As LGBTQ+ people move from renting to home buying, the right neighborhood remains vital. Unfortunately, the fear of discrimination also plays a massive role in the LGBTQ+ community with 46% of renters fearing it during their future home buying process.

“Recall that ‘We, the People’ were once white, property-owning men,” said Ruth Bader Ginsburg, U.S. Supreme Court Justice. “Native Americans were originally not part of ‘We, the People,’ nor were people held in human bondage, women, or newcomers to our shores. Today, ‘We, the People,’ has a marvelous diversity, wholly absent in the beginning.” We are the people. All of us. Together.

 

 


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Real Estate: Leading the Way to Economic Recovery

In the wake of a world wide pandemic and having to hit the restart button into the “new normal” we have found that the US economy is but a shadow of its former self. One bright spark in the universe of unknowns is the real estate industry. More and more U.S. states are re-opening for summer business. People will begin to go back to work and the financial landscape of the country will start to turn around.

The significant reasons why the housing market could be such a driving force is the impact it has on the local economy. Buying and selling a home goes far beyond personal growth and satisfaction, it supports our economy as a whole. According to a recent study by the National Association of Realtors (NAR), the average new home sale has a total economic impact of $88,416. Robert Dietz, Chief economist and senior VP for economics and housing policy of The National Association of Home Builders (NAHB) says: “Overall, the data lends evidence to the NAHB forecast that housing will be the leading sector in an eventual economic recovery.”

On a month to month basis a surge of delayed transactions can be processed as the country opens. Some people who would have, in the absence of the pandemic, closed in March, April and May are likely to close in June and July. Add to those closings the buyers who were likely to close in June or July, in the pandemic’s absence, and there is a surge above normal for summer months. According to experts, the economy will begin to recover in the second half of this year. In addition, CNBC notes: “Mortgage demand from home buyers shows unexpectedly strong and quick recovery…The quick recovery has surprised most forecasters.”

The most considerable challenge for real estate agents is not necessarily the market, but all the changes in how activities are conducted moving forward. The “new normal” for construction, remodeling and sales will result in many new or changed processes. Those who can quickly adjust, by reevaluating and tweaking procedures, will thrive. Those who are stuck with a “this is how I’ve always done it” mentality will find the “new normal” a difficult environment.

We are facing one of the greatest challenges of our lifetime rebuilding the American economy, and real estate and the housing market will play a monumental factor in how quickly we can jump-start our economy which may be sooner than we think.

 


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Uncertainty in the Real Estate Market

Harry S. Truman once said “America was not built on fear. America was built on Courage, on Imagination, and Unbeatable Determination to do the job at hand.” That statement rings true for all of us once again. We all know, that the current situation makes it extremely difficult to project the future of the economy. Sam Khater, Chief Economist at Freddie Mac, says: “The uncertainty of the crisis means forecasts of economic activity are more unclear than usual.” Analysts normally look at economic data and compare it to previous slowdowns to create their projections. This situation, as we know, is anything but normal.

Analysts must incorporate data from three different sciences into their recovery equation:

  1. Business Science– How has the economy rebounded from similar slowdowns in the past?
  2. Health Science– When will COVID-19 be under control? Will there be another flareup of the virus this fall?
  3. Social Science– After businesses are fully operational, how long will it take American consumers to return to normal consumption patterns? (Ex: going to the movies, attending a sporting event, or flying).

The challenge of accurately combining the three sciences into a single projection has created uncertainty, and it has led to a wide range of opinions on the timing of the recovery. Quarterly growth contracted significantly in the world’s second-biggest economy – China – for the first time in 28 years, skyrocketing jobless numbers in the U.S., and warnings from OPEC that demand for oil will fall to a 30-year low, have many wondering if it really will be business as usual once the coronavirus pandemic is over. Sam Khater, Chief Economist at Freddie Mac still has hope stating, “We expect that most of the economic damage from the virus will be contained to the first half of the year. Going forward, we should see a recovery starting in the second half of 2020.”

Right now, the vast majority of economists and analysts believe a full recovery will take anywhere from 6-18 months. No one truly knows the exact timetable, but it will be coming.  A recent global poll shows that people have some serious doubts despite reassurances from many governments that we will see a quick recovery in the economy once the outbreak is under control. The majority of people in 10 out of the 15 countries surveyed say a quick economic recovery is unlikely once the lockdown from the pandemic is lifted, with this sentiment highest in hard-hit European countries.

The fear and uncertainty we feel right now are very real, and this is not going to be easy. We can, however, see strength in our current market through homeowner equity that has not been there in the past. That may be a bright spark to help us make it through. While some have expected more people to find themselves underwater, new research from Atom Data Solutions suggests U.S. homeowners are still four times more likely to be equity rich, than seriously underwater.

Many companies will be able to bounce back nicely. But yes, there will be some businesses that don’t survive the shutdowns. Other businesses might be operating at severely reduced capacity or will have taken on additional debt burdens and, therefore, won’t be able to bring back all of their prior workforces. Experts agree the pace of recovery, likely in the second half of the year, is uncertain because it depends on the extent of the damage in the first half such as the permanent loss of industry.

Bottom Line

“It is better to plan for the worst and be pleasantly surprised than to be caught unprepared.”

 


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High Tech Housing Discrimination

The landmark 1968 Fair Housing law that sought to ban housing discrimination has uncovered a modern threat: the rapid adoption of new technologies for selling and renting homes. Despite decades of progress, there is still much work to be done. As the NFHA noted in its 2019 Fair Housing Trends Report, new ways of advertising homes and apartments using AI and advertising that uses demographic microtargeting to zero in on a certain audience, threaten to continue discrimination of the past by modern means.

The home ownership rate for black Americans stood at 42.3 percent last year, just marginally better than 1970, when it was 41.6! Clearly there is a problem in the system. A report by the National Fair Housing Alliance (NFHA) last month found that housing discrimination cases were on the rise across the nation. Algorithms aren’t just impartial, unbiased systems that fairly sort through data. Rather, they tend to manifest the biases of their creators, and of that society at large.

For instance, when looking at tenant applications, an automated system may reject applicants based on unintended connections between data sets; living in a low-income neighborhood may be correlated with an inability to pay rent, for instance. And since modern algorithms compile and sort among myriad data sets, it can be hard for designers and programmers to understand exactly which data point may have caused the system to reject an applicant. Research from a team of Berkeley researchers released last month found that lenders using algorithms to generate decisions on loan pricing have discriminated against borrowers of color, resulting in a collective overcharge of $765 million each year for home and refinance loans. The analysis of roughly 7 million 30-year mortgages also found that both in-person and online lenders rejected a total of 1.3 million creditworthy applicants of color between 2008 and 2015.

Employing new methods like machine learning and artificial intelligence can make processes such as sorting through tenant applications faster, more efficient, and cheaper. The problem is that when you try to build an automated system that solves social problems, you end up creating something that looks at the data of the past and learns the sins of the past.

Targeting some, excluding others

One of the more high-profile examples of technology creating new types of housing discrimination arose from online advertising. Facebook has been cited numerous times by the ACLU and other advocacy groups for its microtargeting feature, which lets advertisers send ads to specific groups via a drop-down menu of categories, including age, race, marital status, and disability status. Real Estate professionals could purchase and publish ads on Facebook that discriminated against different racial groups and other categories protected by the Fair Housing Act. Facebook has since apologized and restricted targeting capabilities for housing ads. Earlier this month, as part of a settlement with the ACLU and other groups who had filed a lawsuit, Facebook said that housing, employment, and credit card ads can no longer be targeted based on age, gender, ZIP code, or multicultural affinity. The social network will also maintain a searchable ad library so civil rights groups and journalists could keep tabs on future housing advertisements.

Other tech giants, including Google and Twitter, have been investigated by the Department of Housing and Urban Development (HUD) for similar issues. The nature of these social network ads can also lead to unintentional targeting. For example, many of these systems allow for lookalike audience targeting, a feature that can for example, help a clothing company target consumers similar to those who already like or follow a brand. Carry that over to the housing world, and it could help a high-end apartment developer target potential renters who are similar to existing tenants—in effect concentrating on the same kinds of renters who already live in the building, and potentially excluding others.

Making Changes

Many advocates believe the answer to this unconscious bias is to change the way these new systems are designed in the first place. One step toward changing how these algorithms work could be by changing who designs them. Advocates within fair housing and technology need to educate programmers and others about how bias manifests itself in these systems, while also designing technology that includes discriminatory flares or bias signals: built-in checks that can evaluate how systems are performing and whether or not they may be creating biased outcomes.

Larger legal remedies may also be afoot. The House Financial Services committee has been looking into the issue and held a hearing in July, and some advocates have raised the idea of revamping the Communications Decency Act, which governs the behavior of tech firms and social networks, to create more specific rules around this type of bias and discrimination.

A big part of the solution should be keeping humans within the system. Housing can be so foundational to achievement, household wealth, and equality that some things shouldn’t be left to machines. The idea that math is better than humans may be true in some instances but not all. There’s a difference between mathematical fairness and social fairness. We should design for justice instead.

 


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What the USMCA Trade Agreement Means to Real Estate

Real Estate professionals across the U.S. are excited to finally see progress with the House approval of the USMCA. The USMCA (United States-Mexico-Canada Trade Agreement) will replace the current trade policy NAFTA (North American Free Trade Agreement). The House of Representatives passed the revised trade agreement after last month when for the first time, the Canadian, Mexican and U.S Realtor Associations expressed joint, public support for specific policy. The associations represent more than 1.5 million Realtors throughout North America.

Canada and Mexico are our two largest trading partners, millions of American jobs rely on goods and services that go back and forth between the three countries. President Trump said that this will be the most important trade deal ever made by the U.S.A. This deal will re-enforce cross-border investment opportunities for each of the respective real estate industries. It may not get mentioned often, but the trade that happens between these three countries has a large impact on the commercial real estate sector. The construction industry in Texas alone generates more than 400,000 jobs and $62.2 billion to the state's economy.

Expanding jobs means a growing need for more space—particularly, more industrial spaces. Industrial space in Mexico and Canada is growing exponentially. To put it simply, the USMCA eliminates unfair trade practices and is very good for our country’s workforce, which will lead to more consumer spending, including purchase of real estate with new home buyers. The updated USMCA will boost trade on everything from cars to dairy products. Tariff agreements make Mexico an ideal place for manufacturers and auto parts makers to set up shop. It will also offer worker protections and labor fairness and lead to bigger paychecks. These tariffs, combined with other factors like the labor and materials cost and close location, make Mexico a less expensive option than anywhere else in the world.

The U.S. housing market is struggling with an inventory shortage that has depressed sales in nearly all 50 states. The so-called “months supply” number that measures how long it would take to sell off the existing stock of homes fell to 3.7 in November, according to the National Association of Realtors. Most economists consider a six-month supply to be a balanced market. The U.S.-Mexico-Canada Agreement will help to ease the nation’s housing shortage by stabilizing the prices of materials used in construction, according to the National Association of Home Builders.

 


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Michigan Broker Faces Charges for ‘Ponzi-type Scheme’

A civil lawsuit was filed against Viktor Gjonaj real estate broker and founder of the firm in question Imperium Group LLC, which collapsed in mid-August after he stopped going to work. No fewer than six lawsuits have been filed against Gjonaj in recent weeks in Oakland and Macomb counties alleging he owes nearly $5 million to a variety of investors and contractors.

A series of Michigan real estate deals that Gjonaj did in Macomb, Genesee and Montcalm counties over the course of the last few years alleges that Gjonaj doctored purchase agreements to make it appear to investors as if they were buying ownership interests in properties around the state, when in fact they were already owned by the plaintiffs, Krstovski and Masakowski.

One lawsuit filed in Oakland County in August states that a loan was made to Gjonaj totaling $1.5 million to buy the Monroe Center retail strip mall. In another complaint, Gjonaj is alleged to have secured a $2.475 million loan from another investor in exchange for membership interests in five limited liability companies, including two — Manchester Wilshire LLC and JVD I LLC — in which neither Gjonaj or his companies had a membership interest, according to court documents.

Still another lawsuit claims Gjonaj hasn't paid for $197,000 worth of work on a $2.25 million mansion that was being built for him in Washington Township that was allegedly purchased with investor money.

Gjonaj’s response to the allegations at this time have been brief. He states that he “lacks knowledge or information sufficient to form a belief" on the veracity of some of the allegations in the August complaint, including: whether there truly was a Ponzi scheme; if Gjonaj has already left the country to avoid prosecution; and if he fraudulently altered (real estate) purchase documents in order to 'sell,' really defraud, unsuspecting investors, interests in those and other properties that did not exist or that Gjonaj did not own.

At this time the case has been brought before civil court and they are accepting additional complaints as they come in.

 


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Fannie & Freddie Experience More Delays

Nearly 3 years ago mortgage financing giants Frannie Mae and Freddie Mac announced that changes were coming on the standard mortgage application. These were to be the first changes made to the application in 20 years. As the process moved forward, the new Uniform Residential Loan Application was supposed to make its debut February 1, 2020. The government – sponsored enterprises decided additional changes were needed and extended the time frame for it’s mandatory use.

“The redesigned URLA is the result of extensive collaboration with industry stakeholders,” said Andrew Bon Salle, Fannie Mae executive vice president of single-family business.

“We are proud to be a part of this effort that enables lenders to better serve their customers by providing ease and clarity to borrowers during the loan origination process,” Bon Salle said.

The Federal Housing Finance Agency has requested more changes to the URLA form. At issue are questions relating to language preference, home ownership education and housing counseling. These questions have been moved to a voluntary form instead of being addressed on the main application. After revisiting these changes, additional changes are now being revised as well, including:

Redesigned format: Improved navigation and organization that will support accurate data collection and better efficiency for a more consumer-friendly experience.

New and updated fields: Capture loan application details that reflect today’s mortgage lending business and support both the GSEs’ and government requirements.

Clearer instructions: Simplified terminology enables borrowers to complete the loan application with less help from the lender.

Revised government monitoring information: Incorporates the revised Home Mortgage Disclosure Act demographic questions.

Spanish informational version: Will be available soon.

The new timeline for use is still unspecified as the changes will be assessed yet again to see what the impact will be to everyone involved. The timeline and new implementation dates will be released as soon as they are available until which time the new form is available, continuing the use of the current form is required.

 


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Social Media Success for Real Estate Professionals

Now more than ever, social media marketing is essential to promoting yourself as a real estate professional. Gone are the days when home buyers would open a newspaper to look for properties for sale or look up names of real estate agents in a phone book.

Therefore, it is imperative for any real estate agent to use social media in marketing their businesses and listings. And while any realtor can open a Facebook or Instagram account, it's not always as clear how to use social media as a tool to send the right message to the right people at the right time. In our course Social Media Marketing for Real Estate Professionals you will find valuable need to know information to make yourself and your business a social media success! Here are 3 steps to get maximum exposure for your brand and properties online.

1. Use Different Platforms

Remember all platforms are different and the voice and message should match that. The top 3 social media markets are Instagram, Facebook and Twitter. Of course, there are many more, but don’t spread yourself to thin trying to market on every platform.

Post photos on Instagram to generate leads.

Instagram is widely considered the perfect social media platform for realtors. There are more than 700 million users on Instagram, who reportedly press the "like" button on images about 4.2 billion times per day.

  • You get engagement by doing polls on insta-stories (very effective) and asking a question in the last line of the caption. Getting users to engage on your account is one of the best ways to grow and connect with your audience.

Without a doubt, Facebook is the king of social media.

With more than 2 billion users worldwide, it is easy to understand why the brainchild of Mark Zuckerberg is the first thing that comes to mind when one hears "social media."

  • Use the 80/20 rule with updates: 80% of posts ought to be customer-centric while 20% should be about the business. It also helps the cause of agents to post about happenings in and around their communities like local charity events, school-related activities or even gas prices (especially when they're low)

 Tweet to promote listings.

The volume of tweets will greatly boost a realtor’s exposure. The more tweets a real estate agent sends out, the more leads can be generated. In addition to sharing listings, there are other types of content or pieces of information worth tweeting, like advice on moving as well as tips for staging and upgrading homes.

  • Hashtags are also very important, as people use them to search for a particular topic on Twitter. Agents should use hashtags like the geographic area they operate in, recent events or keywords that their target market may be searching.

2. Use more videos and photos

Just like many others, it’s tough to turn the camera on yourself….but you have to get over it! The reality is that no one cares that your video isn’t professional grade all the time, your hair isn’t perfect or that you stumble over your words occasionally. Being yourself is the key. People will respect your effort and want to do business with you if you are authentic. Establishing that you are likable, good at your job, and can be trusted are the keys to winning!

  • Sharing images and video clips on your social media platforms can also greatly enhance the engagement level of real estate agents online.

3. Measure social media metrics.

Finally, real estate agents should identify and track their social media metrics to gain a better understanding of which strategies are working and which should be replaced or tweaked.

    • Metrics like the number of "likes" per share, number of followers and level of engagement can guide real estate agents toward what they ought to do with their social media campaigns. Facebook Audience Insights will tell you which kind of posts generate interest, and which kind lead to unfollows.

 


 

SOCIAL MEDIA MARKETING FOR REAL ESTATE PROFESSIONALS

Learn the ins and outs of social media marketing from experts that work in both social media and real estate.  Use these tools and tricks to upgrade your personal and professional profiles, drive leads, and increase business.

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Real Estate’s American Dream

The American dream. Owning your own home is the largest transaction an average American will make in their lifetime. Conventionally, as a salesperson or broker, you are the catalyst to make that dream a reality. Showing homes, placing offers, negotiating and eventually making the deal. Customarily you work on commission which incentivizes you to get the buyer into the highest transaction you can. To the untrained eye that customary 3% commission doesn’t look like much but as an agent you know that it can add up to thousands or tens of thousands. In 2018 $80 billion dollars were paid in real estate commissions.  This is where the traditional real estate market exists and where current events seek to shake the ancestral market.

Now, more than ever, social media marketing is crucial to reach those customers. Networking, blogging, creating relationships online will all make or break your business. When you have real estate brokerages that are setting new precedence online by allowing more time for focusing on the customer - whether it’s for the buy or the sale. They offer a do-it-yourself approach, such as providing title services, and securing the best mortgage, ultimately offering the buyer an all in one experience. How can you compete? Get online. Start with a social media marketing course like ours and learn how to open doors to new customers and keep your legacy clients coming back. The lessons in this course will take you through the development phase of your social media presence, and on to a place where you are confidently creating online content that represents you in the best light possible. Aligning yourself with your buyer or seller and maintaining a virtual presence will keep your business and reputation attractive to clients. Using Social Media effectively as a real estate professional takes a certain amount of finesse, but if done correctly, can be a major catalyst for advancing your career.


 

SOCIAL MEDIA MARKETING FOR REAL ESTATE PROFESSIONALS

Learn the ins and outs of social media marketing from experts that work in both social media and real estate.  Use these tools and tricks to upgrade your personal and professional profiles, drive leads, and increase business.

$42.00Add to cart