Industry

Friday Flash: We knew it

Author
Brian Boero
No.
1122

Here’s the thing eating at me… 

We didn’t need the Newsday investigation to tell us that discrimination still exists in real estate.

We knew it.

Newsday just made us face it. 

Only last week, an agent friend showed me another agent’s posting on a private listing network:

“I have an urban family looking for…”

He then scrolled down to show me an earlier post from this same agent:

“Working with an ideal family looking for…”

When my wife and I were looking for our first home in 1999, our agent told us that a house we liked wasn’t a good option because the neighborhood was “ethnically problematic.”

So, yeah, me — the white guy living in the San Francisco Bay Area, one of the most self-righteously progressive regions in America — knew it. But I’ve seen it from the perp’s side of the table.

Newsday, through the cockeyed hidden camera lens, put me on the other side.  

The residential real estate business is as American as it gets. It is entrepreneurial in spirit, welcoming to a fault, and rewarding of hard work and moxie. It is also, like the rest of America, too often compromised by prejudices we like to pretend are behind us. 

That those prejudices have been laid bare in all their slimy duplicity should result in some sort of reckoning, shouldn’t it?

The NAR’s comment was not encouraging:

“The National Association of Realtors was deeply troubled to review the results of the local New York Newsday’s three-year investigation into how real estate agents on Long Island treat buyers of different backgrounds, which do not reflect the ethical commitment made by 1.4 million Realtors nationwide.”

We’re going to play the “real estate agent” versus “Realtor” game here? Give me a break.

If the Code of Ethics — often invoked in situations like this and given a loving public massage — is to achieve its fullest meaning, then it must compel action at an institutional level. That action, in this case, should be revocation of the membership of every last Realtor implicated in this report.

At the very least. 

Because now everyone else knows too.

There are two obvious topical off-shoots to this: private listings and cooperation and compensation.

Steered and discriminated against as they were, the people of color in the Long Island case could at least see virtually all the homes for sale by going to the MLSLI website, or to any of the websites that receive data from the MLS. Consider how deeply disadvantaged they would be if the MLS did not exist, or if half the inventory were “exclusive”. 

The fair housing dimension to the private/pocket listing issue is real. 

The thing with cooperation and compensation, though, salubrious in so many ways, is that it has a chilling effect on those who might call out discriminatory behavior. Because competitors work together, and agents do deals with the same agents over and over again, you don’t want to burn bridges. You’re not going to call out the guy who posted about his “urban family” because you’re gonna need him someday.

This is complicated.

If I may shift to lighter matters, it is worth noting the continued innovation around the deeply-unsexy-but-actually-sexy area of title and escrow. 

Qualia, which has built software to streamline the closing process, announced a $55 million series C round this week. 

Modus, which plays in the same space, raised a $12.5 million series C round led by Trulia Co-founder Pete Flint.

This is serious money focused on rewiring the mechanics of the real estate transaction. It’s worth paying attention to because however the distribution of business shifts in our changing industry, everything ends up, physically or digitally, at the closing table. 

Have a good weekend.

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