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Can a buyer accuse you of discrimination for rejecting an offer?

On Behalf of | Jun 26, 2024 | Real Estate Law

This summer, a story from Virginia went viral when a young Black scientist took to social media to report that her offer on a beach condo was derailed when the elderly white seller told her real estate agent, after meeting the buyer at her walk-through, that she wouldn’t sell to a Black person. At that point, the would-be buyer had already toured the condo virtually and made a downpayment. 

Refusing to sell a home to someone because of their race is, of course, illegal under the federal Fair Housing Act (FHA), which dates back to 1968. States, including Connecticut, also have their own FHAs. 

In the beach condo story, the selling firm quickly distanced themselves from their client. The sale appears to be going through.

The federal FHA makes it illegal to consider a buyer’s race, sex, age, national origin, familial status or other characteristics protected under federal and/or state law. This can sometimes be tricky for sellers. They may turn down a potential buyer’s offer for a perfectly valid reason. However, if that buyer belongs to a protected group, they may assume that discrimination was the real reason. 

There are legitimate reasons to refuse an offer

There are legally valid reasons to reject a potential buyer’s offer. These include the following:

  • You’re holding out for or have already received a better offer.
  • The buyer hasn’t been pre-approved for a mortgage loan.
  • You’ve decided not to sell the home.

This last one can be complicated if you’ve already signed the purchase and sale agreement. You may have to pay some penalty to the buyer, but if your reason for backing out the deal is valid (like a job offer or engagement that fell through), you shouldn’t have to stand by the agreement.

Avoiding discrimination claims

A good way for a seller to avoid allegations of discrimination is not to meet potential buyers. Let your agent handle these interactions and the offers. Reputable agents present offers without comment on protected characteristics. It’s also important that you’re consistent in your decisions. For example, if you reject an offer you consider too low and then ultimately accept a lower one, that could be problematic.

Avoiding unfounded allegations of illegal discrimination is just one reason why it’s crucial to work with experienced real estate and even legal professionals as you sell your home. This is likely among the most financially significant you’ll ever be involved in, so it’s worthwhile to find the right guidance.