There are several solid reasons to hire an agent to help you in a real estate transaction, however, the most important reason is to avoid any legal liability when you try to buy or sell real estate by yourself. Here, we are talking about discriminatory practices.
I was reading today the Alexandra Ferguson article posted on Daily Bruin on January 11, 2019 “Hidden Histories: Racist, discriminatory past of how Dodger Stadium came to be“, and I remembered part of the racist and discriminatory behaviors, clients, banks, lenders, inspectors, appraisers, and real estate agents had in the old days. Most of these stories were learned while getting and renewing my real estate license.
Today, most of these practices are banned, but we need to be alert on the kind of behaviors and practices to avoid them affect our current real estate transactions. In the next paragraphs, I will extract and summarize some of Ferguson’s sentences to explain what means redlining.
Redlining
In the 30’s last century, the HOLC Home Owners’ Loan Corporation implemented policies designed to turn America’s citizens into homeowners.
However, in 1935, the HOLC systematically collected data about neighborhoods in 239 cities to assess mortgage risk. With this data, neighborhoods were ranked and colored from A to D, as follow:
•
• B neighborhoods were deemed still desirable, represented with a blue color
• C were those declining neighborhoods, represented with a yellow color
• D areas were neighborhoods were considered hazardous, represented with a red color.
This the way, the term “redlining” was created. Though considered objective, these ratings were riddled with racist criteria to deem some neighborhoods “desirable” and others “hazardous”.
This classification system drove banks away from neighborhoods with African-Americans, Mexican-Americans, Asian-Americans and sometimes immigrant groups that were newly arrived such as Slavs, Jews and Italians.
Redlining subsequently prevented many would-be homeowners from securing loans otherwise within reach. Not only did redlining derail many from ownership, but maintenance, improvement and renovation loans were also scarcely approved, casting residents in a vicious cycle: inability to improve neighborhoods triggered disrepair and decline, seemingly justifying redlining practices.
Alexandra Ferguson article explains how a neighborhood named Chavez Ravine, located in a canyon in the hills north of downtown Los Angeles, was promised to become the “Elysian Park Heights” housing project, where most of their residents will become homeowners, but then the project was blocked and sold to Walter Francis O’Malley, owner of the Dodgers. And after a referendum, the Dodgers’ Stadium was built.
Most owners do not have the training to avoid discriminatory practices when they plan to sell their properties. A discriminatory comment or practice can make them responsible for compensatory payments. It is less expensive to hire a well trained real estate agent who will give you the best money for your property and free you from any legal liability.