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Opinion: Bias in real estate may not be what you think

Sometimes change is thrust upon us — think COVID-19. In January of 2020, most people’s closest association with Corona was beer. The general consensus was that the virus would be just another passing news story — it wouldn’t have any real or material impact on our lives. As any professional associated with the real estate industry knows, the impact went way beyond virtual home tours and fluctuating interest rates. 

A similar cognitive dynamic occurs when laws change. In California, Senate Bill 263, goes into effect on January 1, 2023. This law requires real estate agents licensed in California to take a two-hour implicit bias course. Similar requirements already exist for California lawyers, nurses, and doctors.

The course includes the following:

  • A component regarding the impact of implicit bias, explicit bias, and systemic bias on consumers and the historical and social impacts of those biases.
  • Actionable steps licensees can take to recognize and address their own implicit biases.

Don’t dismiss how implicit bias impacts your decisions

When learning of this law and the training requirement, many immediately experience a psychological phenomenon of “othering.” A bias born out of our reluctance to have anyone tell us what to do and an over-reliance on our own knowledge. Othering immediately dismisses the importance of understanding how implicit bias impacts your decisions, relationships, and, in this context, your real estate practice. 

“I would like to believe that I don’t have biases,” says Grazia Bennett, a Realtor with Sotheby’s International Realty in San Francisco. “In reality, I know that I have natural and unintentional biases. It is my responsibility to become aware of these and to act to minimize or eliminate them. All players in the real estate industry — brokers, agents, appraisers, escrow and mortgage professionals — have been called to look inward and change not only at the business level but also on a personal level.”  

The Bias ecosystem

As illustrated in the Bias Ecosystem:

1.     Cognitive bias is a by-product of how our brains process information.

2.     Social biases evolve through our actions and behaviors increasing over time.

3.     Institutionalized biases become embedded into our work processes, cultural norms, and organizations.

A contextual understanding is necessary to implement real change. 

This is where the law and practice of real estate meet. Sometimes it takes legal action to assist in fostering change. Take the Fair Housing Act in 1968. While even the most ardent advocate will concede it wasn’t the final “end-all-discrimination” solution, it was a necessary step in shifting tectonic societal norms, otherwise known as institutionalized bias. Systemic change takes time.

There is much work still to be done so this law will be fully enacted, and its desired effect fully realized, despite its appearance over fifty years ago. Zip codes are still a major factor in setting ourselves up for success in life.

As a professional working in the real estate industry, it is imperative to understand how implicit bias impacts your decisions, your relationships, and can lead to disparities in how real estate transactions take place.

Start with a thorough self-examination

Deepen your understanding of your own implicit biases and develop real-time strategies for disrupting bias in client and professional interactions. While this law, SB263, will mandate professional development, progress only occurs if the biases are named and tamed.

Through awareness over time, a change in mind and heart leads to different behaviors, transactions, and disruption in processes, protocols, and who gets to live where. This is the longer-term strategy for disrupting the institutional biases that still remain in our societal structures. 

If COVID-19 has done one thing, it is to lay bare the inequities that exist and persist. It is time to move beyond simple gestures like using “primary bedroom” instead of “master bedroom” and begin really exploring how to make the dream of homeownership a reality for wider demographics.

And if you’re reflective and intentional at mitigating bias, you will no doubt discover you can help even more people achieve the resplendent dream of home ownership. 

Matthew J. Cahill is president and principal consultant with Percipio Company.

This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.

To contact the author of this story:
Matthew J. Cahill at mjc@percipiocompany.com

To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com