Practice of Real Estate
Practicing real estate ethically and legally protects consumers and the licensee's career. This chapter covers fair housing, antitrust and advertising rules, and the proper handling of client funds.
Fair Housing Law
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, sex, national origin, familial status, and disability. Prohibited practices include steering (guiding buyers by protected class), blockbusting (inducing panic selling), and redlining (denying loans by area). The Americans with Disabilities Act requires accessibility in public accommodations. Many states add further protected classes.
Antitrust and Advertising
Antitrust law prohibits brokers from conspiring to fix commission rates, allocate markets, or boycott competitors; commission rates are always negotiable between a broker and client. Advertising must be truthful and not misleading, must identify the brokerage in most states, and must comply with fair housing by not indicating a preference for a protected class.
Handling Client Funds and Ethics
Money held for others, such as earnest money deposits, must be placed in a separate trust or escrow account and never mixed with the broker's own funds (commingling) or used for the broker's purposes (conversion). Licensees must keep accurate records, follow their state's rules, and act with honesty and competence in every transaction.