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Should Realtors Discuss Criminal Cases and Incidents With Buyers?

There are hard questions realtors face when helping clients.

Our hearts and condolences go out to the Kauffman family. With the heartwrenching news of the rape and murder of Skyler Kauffman, Lisa Loper, member of the Scott Loper Team at RE/MAX Realty Group in Harleysville, brings up hard questions that realtors face when helping buyers and sellers.

There are so many rules that real estate agents are supposed to follow when working with buyers and sellers.  First, there is the Fair Housing Act of 1968, which forbids discrimination based on race, color, national origin, religious preference, sex, familial status and handicaps. 

For example, if a seller doesn’t want to accept an offer from a gay couple, that is a violation of the Fair Housing Act. But even if a buyer has young children and requests to move into a neighborhood that has lots of families, an agent cannot follow those specific instructions without being in violation of the Fair Housing Act—that is discrimination based on familial status.  According to regulators, it is the price and features of a home that agents must concentrate on, not the neighbors.

Keeping with the theme of Fair Housing, real estate agents are not allowed to “steer” buyers to certain areas. Steering is the practice of trying to place buyers in areas based primarily on the racial and ethnic makeup of that area.

Blockbusting is another forbidden practice. Blockbusting is the practice of scaring people about an area because of events or conditions that will “supposedly” change a neighborhood in a negative way. 

Many decades ago, blockbusting occurred when homeowners felt threatened that an influx of minority groups would occur and change the neighborhood.  These homeowners sold at low prices to get out quickly. 

Today, any form of blockbusting inevitably drives prices down, as the perception is the area is “going downhill,” crime will rise, and home values will decline. Blockbusting was made illegal under the Fair Housing Act of 1968.

On the flip side, searching for a home based on school district is perfectly acceptable. Many buyers in the Lansdale area will want a home that is in the North Penn School District. Many want to avoid districts such as Norristown based on reputation or “what they have heard.” 

Others will compare districts online, which include statistics like graduation rates, spending per student, and SAT and PSSA scores, and make selections based on their own analysis of the facts.  For example, on a scale of 1-10, Education.com gives a test rating of 9 to North Penn School District and a 2 to Norristown School District.

Then, there is Megan’s Law and whether or not sexual predators live in a particular area.  Keeping with the theme of Fair Housing and preventing blockbusting, real estate agents are not supposed to discuss the crime statistics of a particular area. 

However, the real estate community recognizes the desire of buyers to live in a safe neighborhood. But what constitutes safe? 

In plain language on the Pennsylvania Agreement of Sale, buyers are encouraged to check with the local municipalities, police departments, and the PA State Police Registry of sexual predators. 

What about disclosure? Sellers and their agents are supposed to disclose known material defects affecting a property. A material defect is defined as “a problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to the people on the property.” Is a predator next door a material defect?  What if the predator is a block away? A mile away?

There are cases where a murder or death occurred in a property for sale. Does it matter if it was a heart attack in the driveway or a murder-suicide in the master bedroom? Even the courts don’t agree on whether or not a murder or death on the property constitutes a material defect. 

In Philadelphia, where crime and murders are more common, real estate agents have been advised not to disclose a death on the property because it is believed that such disclosures will further deteriorate already “bad” neighborhoods. But this is information most buyers would want to know.

In the case of Sklyer Kauffman, the man accused of her brutal rape and murder was not on a sexual predator list. No one could have predicted this horrific crime happening in Souderton any more than in Lansdale, Harleysville or Horsham.  Should real estate agents discuss this incident with buyers who may want to move to Souderton?

There are no clear cut answers to some of these questions. Buyers should always perform their own due diligence and research the areas they want to live. Check with local authorities. Visit the area at different times of the day. Talk to neighbors. Get a feel for the community and surrounding area.

Your comments on this topic are welcome. For more information, contact Lisa Loper at 215-256-1200, ext. 212, or visit www.scottloperteam.com.

Kelly Anderson May 18, 2011 at 05:21 PM
No offense, but this article was stupid. James Troutman wasn't on any sexual predator list, and so all this real estate agent does is use Skyler Kaufmann's death as a way to write an article about real estate (with her name and realtor group right at the top.) Skyler Kaufmann's death is irrelevant to the real estate industry, especially because she lived in an apartment. Grow up, Lisa Loper.
Lisa Loper May 18, 2011 at 08:22 PM
Dear Kelly, Generally when someone says no offense, they mean to offend. We recognized in the article that Troutman wasn't on a predator list. There WILL be people who will not want to live at the Garden Apartments or near them because of what happened there. Since when was an apartment not part of the real estate industry? We have renters all the time. The case highlights how crime and other factors can affect housing and questions that we face daily from clients. Legally there are things we can and cannot discuss and then there are the gray areas. I have a million articles I could write about real estate and was not trying exploit the Kauffman case or be insensitive to the family. This case will be in the news for some time to come. Would it have made more sense to discuss JonBenet Ramsey? That house has been on and off the market for three years encumbered by the stigma that still surrounds it. Lisa Loper
Tony Baize May 18, 2011 at 11:18 PM
Just to correct the record, the federal Fair Housing Act does not prohibit discrimination against gays and lesbians. Many state and local fair housing laws do, but the federal law is silent on sexual orientation. That being said, it has been a violation of the Realtor Code of Ethics to discriminate against someone based on sexual orientation since January 1, 2011. -- Tony www.fairhousingpodcast.com
Lisa Loper May 19, 2011 at 12:58 AM
Thanks Tony for the clarification. I thought the example I gave would fall under familial status. Either way, it is wrong for a seller to try to discriminate as to who should buy their house. Lisa

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