It’s Real Estate Agent 101 to highlight any or all positive attributes around a home for sale. After all, many buyers may be unfamiliar with the surrounding area, so showcasing things like parks, shopping areas, schools and more can only move the process forward.
But what about things that most people may not want to live close by? Is it for you to bring them up when their relative impact is subjective? The obvious ones are in plain sight, such as highways, power plants, voltage towers, landfills, etc. The ones that either are not obvious or perhaps have not yet even landed are the ones that can be problematic.
In New Canaan, Connecticut, a leafy, upscale community where many residents want residential construction to be mostly single-family homes, the town just lost a four-year battle with the state over a developer’s desire to build a large apartment complex that included affordable housing units.
So what would you do as an agent there knowing what was a huge complex literally on the horizon, but with listings close by and ready to close?
“If a buyer is unfamiliar with an area, I recommend they visit the location on different days, various times of day and night and also talk to neighbors and people they run into,” says Pam Rosser Thistle, an agent with Berkshire Hathaway HomeServices Fox & Roach, Realtors® in Philadelphia. “We cannot steer buyers to specific neighborhoods. If there are questions asked, we provide resources so that they can do their own research.
“What I have found is that buyers have varied perceptions as to what is appealing and a turnoff. Agents must not insert their own personal opinions or preferences into ‘what is right’ for a client. Listening is important. And matchmaking based on clients’ objectives. What we can offer is advice on trends, comps and what will add or detract from value.”
Todd Luong, with REMAX DFW Associates in Frisco, Texas, notes that working with buyers and sellers near an affordable housing development can be a sensitive topic.
“Some people fully support affordable housing, while others have concerns about having it close to where they live,” he says. “There is definitely a ‘not in my backyard’ mindset, where people agree that affordable housing is needed but become more concerned when a project is proposed near their homes and communities.
“When working with sellers, I sometimes encounter concerns about how a proposed affordable housing project might affect buyer perception. When working with buyers, some will specifically ask whether there are any affordable housing developments nearby or planned for the future. My role is not to tell clients what they should think. My role is to help them gather facts so they can make their own decisions.”
In a big city like New York, co-ops dominate the landscape, especially in Manhattan. Fair housing laws are more prevalent than affordable housing. Fair housing is about civil rights and equal access, ensuring no one is denied housing due to who they are.
Gerard Splendore, a New York City real estate broker at Coldwell Banker Warburg, is careful what to talk about and what not to.
“I always provide buyers with as much information as possible about any property they are buying,” he says. “The issue of informing buyers about fair housing in a building they are purchasing in could be seen as a violation of fair housing laws, but it avoids that conflict if every buyer is informed of the building’s fair housing designation.
“If I were to have more than one buyer in a building with a fair housing component and did not provide all of the buyers the same information, no matter what type of unit they were buying or what price point, I would be in violation of legislation that prohibits ‘steering’ buyers to areas or units based on race, religion, sexual orientation or family status. In a new construction, it is likely that the listing description provided by the developer would emphasize the fair housing component. Even so, I would explain it to a potential buyer and ask if they had any questions.”
Detailed information
Splendore goes into more detail, explaining that the Low-Income Housing Tax Credit (LIHTC) is the largest federal incentive that developers can utilize.
“The federal government issues these tax credits to state agencies, which in turn award them to private developers,” he says. “Developers typically sell these credits to institutional investors to help fund construction. Not all, but many municipal and county governments provide either full or partial tax exemptions for a number of years, ranging from 15 to 40 years.
“Buildings with a percentage of fair housing units often advertise tax advantages to developers that can be passed on to buyers. Developers must strictly adhere to housing laws in their area and federal legislation. If the developer qualifies for tax advantages and, in turn, passes them on to buyers, the marketing will emphasize this benefit. Of course, tax advantages must be offered to all buyers, whether in affordable or market price units. I would take it upon myself, as a buyer’s agent with a signed agreement from any buyer I was representing, to explain the tax advantage and the expiration date.”
While also happy to provide information to clients, Luong does not voice any personal opinions.
“I am careful to remain neutral,” he says. “I do not characterize an affordable housing development as good or bad. Instead, I provide factual information when it is available. For example, if a development has already been approved, I may point clients toward public information provided by the city so they can review the details themselves.
“I also avoid steering. Fair housing laws are very important, and it is not my job to direct buyers toward or away from any neighborhood based on personal opinions. Instead, I focus on supplying objective information and letting clients decide what matters most to them.”
Directing clients to where they can find whatever public information is available is a logical way to turn potentially controversial conversations into simpler back and forths.
“When clients ask about affordable housing developments, I answer factually and avoid speculation,” says Luong. “If they ask whether a project exists, I help them locate public information from the city or other official sources. If they ask about crime, I do not give my personal opinion. Instead, I direct them to objective resources.
“For example, the Texas Department of Public Safety compiles crime statistics that can be searched by county, and many cities and counties provide crime-mapping tools on their websites. I encourage clients to review those sources directly and draw their own conclusions. If they ask whether property values will go up or down because of an affordable housing development, I explain that real estate markets are influenced by many factors. Housing supply, interest rates, school ratings, economic growth, neighborhood conditions and overall market demand often play much larger roles than any single development. I avoid making predictions that cannot be supported by data.
“At the end of the day,” he concludes, “I supply the facts, explain what is known, point clients toward objective resources and let them decide what is best for themselves and their families.”
