To all the agents in the house,
On Friday, Redfin announced a Fair Housing Act lawsuit settlement that is going to cause what looks to me like significant changes to Redfin's business model. What I'm not sure about is the relevance this agreement has for other brokerages, listing websites and agents who do not work at Redfin.
I reported on the agreement here, and the National Fair Housing Alliance, the lead plaintiff in the lawsuit against Redfin, provides a publicly viewable link to the settlement in full here.
Maybe the biggest impact for Redfin is that they can no longer automatically deny service to a customer because the home the customer wants to buy is not expensive enough to be worth Redfin's while. Redfin must also continually report to the Fair Housing Alliance and allied groups any price threshold that it is using to guide who they serve.
Perhaps the most compelling issue of this case has been why among all the targets they could pick, the Fair Housing Alliance chose Redfin, a brokerage that uses employee agents, who appear less incentivized to serve clients strictly based on the price they are willing to pay for a home (or are able to sell an abode). In a February story, I dove into the legal vulnerabilities Redfin faces as both an employer exerting control over agents, and a highly recognized listings website.
The Fair Housing Alliance's perspective, though, is different. I asked Diane Houk, the lead lawyer in the case for plaintiffs, if Redfin was perhaps a ripe litigation target because of these vulnerabilities. Houk flatly replied, "No," and also took exception to my contention that a bunch of brokerages focus on the luxury elite (Which, in fairness to Houk, is an opinion I may have developed covering, ahem, Beverly Hills real estate.)
"Only a few realty firms focus on affluent areas; the vast majority of them work with buyers/sellers of homes at various prices," Houk said. "What is interesting and novel here is using an automated website platform to inform prospective buyers that service will not be provided for certain homes based on home price throughout a metro area."
The National Fair Housing Alliance has now used litigation to exact policy changes from not just one of the most prominent real estate companies in America, but also the Appraisal Foundation and even mighty Fannie Mae.
Who will they target next?
"NFHA is always focusing on realty firms, lenders, appraisers, home insurance companies and other businesses that impact the housing market," Houk said.
Agents, please send me your thoughts anonymously to mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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