Real estate diversity expert Michael D. Lee offers suggestions on how to help make office diversity programs successful in as little as six months and discusses the best moves and biggest blunders brokers make regarding fair housing and diversity.
What barriers do people face in getting their own home?
Many people, especially multicultural buyers, need education about the rather complicated home buying process. Some think that you need perfect credit to qualify for a home loan. Many Hispanics believe that if you don’t owe anyone anything that you should have excellent credit when you don’t have any credit at all. Many Hispanics and African Americans don’t know that if you pay bills late it adversely affects your ability to qualify for a home loan. Most white Americans learn this from friends and family who already own homes. Less than half of Hispanics and African Americans own a home, though, so the majority of people in those groups probably don’t know anyone who owns a home.
REALTORS® forget how complex purchasing a home actually is because we do it for a living. We forget about the home search process, writing a contract, qualifying for a loan, escrow (where applicable), title insurance, inspections, the many ways of holding title, tax consequences of homeownership, budgeting for a mortgage payment and everything else.
If you had to identify the three biggest fair housing mistakes brokerages make, what would they be?
First, thinking that fair housing means treating everyone the same. If that was the intent of the law that would mean that when a prospective buyer who is blind comes into your office you should hand him or her a brochure to “read.” Fair housing means adjusting your practices to meet the unique needs of your buyers so they have an equal chance of owning a home. If a person is blind, you describe properties and its amenities to them. If a client has culturally-specific needs, we adjust our practices to meet their needs.
Second, underestimating the potential of the multicultural market. According to NAR, 60 percent of all homebuyers today are minorities and they want to own homes . . . .
And third, thinking that minorities only want to buy a home from an agent of their own culture. Many Hispanics and Asians don’t want to buy a home from a Hispanic or Asian agent because they’re afraid that agent might spread their financial activities around their respective communities.
What have brokers and/or agents done in the past couple of years that has positively impacted fair housing in this country?
Some brokers have held buyers’ seminars to help people understand the complexities of the home buying process. They will bring in attorneys to talk about the legal ramifications, accountants to discuss the tax and financial implications of home ownership, title officers to go over title and escrow issues and their agents will talk about how to find the right home. This helps buyers from all cultures overcome the fear surrounding home ownership.
What are the biggest challenges—to agents, to brokers, to prospective homeowners, to the nation—to increasing homeownership rates over the next few years?
Agents and brokers must become “culturally-competent” when it comes to selling homes to previously underserved communities. This means understanding the unique needs of minority buyers and knowing how to meet them, including, but not limited to: what different cultures look for in a home; how cultural beliefs can impact a home purchase; and how to haggle with people who come from negotiating cultures.
Is it ever too late to develop an interoffice program to increase service to diverse groups?
Real estate professionals can develop cultural-competence in less than six months of concentrated training and practice. Such a program would include:
- Cultural awareness
- Building rapport with culturally diverse clients
- Cultural sensitivity training
- Culturally sensitive sales presentations
- Negotiating techniques
- Differences in contracts around the world
- Multicultural closing techniques
- Obtaining referral from diverse clients
Why do some people seem to have an easier time achieving homeownership than others, regardless of race? Does our society harbor hidden advantages to any group or groups of people when it comes to homeownership?
Whites in this country generally have an advantage because nearly 70 percent of Caucasian families already own a home. As prices increase it becomes more difficult for first-time buyers to purchase a home without help from family members who own property that has equity. Previous discrimination has made it difficult for minorities to own homes and they are only now slowly closing the home ownership gap.
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