Bias in Real Estate & How to Avoid It

by Ann Heinz, JD, CDEI | Oct 07, 2022
Bias in real estate and how to avoid it
No matter who we are or where we come from, we all have learned ideas about people of diverse backgrounds and appearances from a trusted source that we now consider “truths”. These beliefs that we carry about a subject’s traits are called biases, and they are so deeply ingrained in who we are as people that we often do not stop to think about how our biases impact the daily interactions we have with others. 

In the real estate industry, it’s important for licensees to understand how to recognize bias so they can foster business environments that promote diversity, equity, and inclusion, as well as compliance with fair housing laws. Below we discuss the different types of bias and how to challenge it.

What is Bias?

Our ability to make ethical decisions is often influenced by our past experiences and ingrained beliefs—beliefs that may sometimes be based less on actual experience and more on our expectations or perceptions. In other words, our decisions are influenced by our biases. The term bias refers to the tendency to prefer one thing, or one set of circumstances, over another—often without a logical reason.

Types of Bias

Implicit Bias
Implicit bias typically comes from our observations early on in life. It is often referred to as unconscious bias, because it results in thoughts and actions that are involuntary, unintended, and even contrary to our conscious beliefs.

Implicit bias often occurs when we categorize individuals based on perception rather than fact. We then rely on those perceptions and stereotypes even though they may be illogical or even rooted in falsehoods.

These are some of the most common types of implicit biases:

  • Gender bias
  • Ethnicity bias
  • Age bias
  • Appearance
  • Disability bias
  • Political affiliation bias
  • Socioeconomic status bias
Explicit Bias
Explicit bias occurs when we intentionally act on our biases—consciously treating other people according to how we have judged them. Explicit bias can be manifested in either a positive or negative manner but is clearly unacceptable when our actions are negative.

How Implicit Bias Works

When your brain receives sensory information, the first thing it does is sort it into known and unknown, useful, or not useful, and positive or negative. Your brain sorts through information to decide what to keep, what to throw away, and what to ignore. To deal with information overload, our brains create mental shortcuts (biases) resulting in unconscious snap decisions, which are sometimes positive, sometimes negative, sometimes beneficial, and sometimes harmful.

Of course, all of this is happening at a level in the brain we do not consciously control, which is why an implicit bias is also called an unconscious bias. When a person is implicitly biased about a subject, the person’s actions are being dictated by an anchor bias in their subconscious of which they are not consciously aware.

Challenging Implicit Bias

Before we can challenge implicit bias, we must figure out how to get past the brain’s defenses to accurately assess ourselves. To do this, it is helpful to accept a few ideas as universal truths:

  • People are guided by biases they are not even aware exist.
  • Unless we consciously work to direct our thoughts against our implicit biases, our brains will naturally take the easiest route through our biases.
  • We must see value in challenging our implicit biases if we are going to be able to change them.

Once we recognize what ideas are implicitly driving our behavior, the next step is to challenge the biases we have. A helpful step in the process of challenging our biases is to reflect upon them. Isolate a single negative bias and imagine how that bias might be impacting our actions, and how those actions impact the people for whom we hold a negative implicit bias.

Bias in Real Estate

Newsday, a newspaper/multi-media content provider conducted a study using 25 trained, undercover testers. Over a three-year period, they tested 93 real estate agents, secretly recorded 240 hours of meetings, and analyzed 5,763 house listings. The findings showed widespread evidence of steering and unequal treatment of home buyers by some of the real estate agents.

The study followed up with the real estate licensees who showed evidence of negative bias. Many of those agents did not realize their varying treatment of their different clients. They, in fact, thought that they were doing a good job of representing their clients in the process of selecting a new home. The agents’ implicit (unconscious) biases were playing out in their real estate careers without a clue on their part, thereby impacting their clients, sometimes without even their clients realizing the impact on their lives and purchasing decisions.

Learn More

We live in a rapidly changing world, and real estate licensees must ensure that their business practices serve the needs of vibrant and diverse communities. Our course, Understanding Implicit Bias will help real estate licensees learn how to recognize biases that can lead to unfair decision-making or actions that are not in the best interest of the client and that may violate fair housing laws. 

To order this course and more, visit the WebCE Real Estate CE Catalog.

 

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