fair housing act

It may seem like a harmless question, but it's more complicated than you might think.

It makes sense that you’re curious about the people who could end up residing in your old home sweet home. Do they have kids to play on that swing set in your (soon to be former) backyard? Is it a married couple or a single? But before you start pelting your real estate agent with questions, think again. According to the Fair Housing Act, you’re prohibited from asking about the potential buyers.

What is the Fair Housing Act?

The Fair Housing Act is all about preventing discrimination against renters and homebuyers. Essentially, federal law makes it illegal for anyone to choose not to sell to a potential buyer who belongs to a “protected class.” This includes race, religion, nationality, age, and sex. Even discussions about the buyer’s family status or occupation should be off the table.

That means that if you start asking your real estate agent for personal details about a potential buyer, you could be entering iffy legal territory. “I can’t tell you legally who lives where or who is buying your house,” says Mark Ferguson, a real estate agent and the creator of Invest Four More. “Even if I could, I would not.”

What you should know about the Fair Housing Act before you sell

Let’s say, for example, you just want a little peace of mind knowing that your previous home — where so many memories were made — is going to a family who will take good care of the property. You have an emotional connection with the house, and naturally, you want it to be in good hands. So when a family makes an offer, you simply ask to see a photo of the buyers. It’s just your way of picturing the happy fate of your home and putting your mind at ease. But then you decide to turn down their offer because you receive a better one the next day. And it turns out, the family who made the initial offer are immigrants. Even if you couldn’t have known just from a photo, the buyers could theoretically have a basis for a complaint with the U.S. Department of Housing and Urban Development.

It boils down to this: As a seller, you’re not legally able to consider factors beyond price and the terms of an offer without potentially planting the seed for a fair housing complaint against you. So err on the side of caution and don’t ask to see photos of your potential buyers.

From the buyer’s perspective, there’s no harm in sending a personal offer letter to the seller when making a bid on a home. This is not uncommon and can sometimes help seal the deal. However, the sellers may choose to not read the letter due to potential concerns about discrimination.

On a similar note, Fair Housing Act rules also state that homebuyers are not allowed to ask real estate agents about neighborhood crime rates, churches, average household incomes, or even local schools when they’re house hunting. You’re better off doing your own neighborhood research about the demographics and statistics of an area.

Have you ever refused to read an offer letter because of the Fair Housing Act? Share your experiences in the comments!