Under the Fair Housing Act,

it is prohibited to "impose different sales prices or rental charges for the sale or rental of a dwelling."

But in the residential market, does price targeting actually happen?

What I do mean by price targeting? If you see a potential home buyer driving a BMW to visit your home, you might feel like charging $10,000 more than another potential buyer driving a lemon.

My question is when a seller lists the price via broker or self-advertisement, is it legal to price discriminate based on the information the seller observes from these potential buyers? Crude examples inculde shoes, watch, wallet, and car quality.

My understanding is, sellers generally put a price higher than what it is considered a fair market value in anticipation of price negotiations. So there is always a downward pressure on prices, and you cannot really "jack up" the price just because you see a person with BMW, legal issues aside, the person would walk away from the deal if the listed price is lower than what the seller proposes on site. It is not like you can do a "work" done on your house that would add that much value in between setting the appointment and actual home viewing.

The confusion is the FHA prohibits different sales prices, but almost always some degree of negotiation occurs between seller and buyer, so the asking price and transaction price are different. So, it seems perfectly fine to "deviate" from the list price to "close" the deal.

Now, if a seller cannot directly increase the price when a rich potential buyer comes for a showing, then in reality, is there a way a seller would re-distribute other costs (e.g. closing fee, admin fee, etc) onto this buyer compared to when she deals with a buyer who doesn't "seem" economically affluent? For example, if the seller knows the source of funding that the newly-wed couple gets is from their parents, then wouldn't the seller like to reap the benefit from this piece of information?

My question is: when a seller sees someone who "seems" to willing to pay a higher price than what the property is listed for, what kinds of strategies are there for the seller to benefit from this, and in doing so, does she face legal issues?

  • It may be worth noting that the real intent of the Fair Housing Act was to eliminate institutional discrimination (i.e. a giant apartment complex trying to charge different rates based on race as a way of segregating their tenants) and not so much at individual homeowners trying to sell their house. Although - of course - it does still technically apply to those individuals.
    – dwizum
    Oct 21, 2019 at 13:45

2 Answers 2


From the FHA documentation you link to, there are specific types of discrimination that are not allowed

Who Is Protected? The Fair Housing Act prohibits discrimination in housing because of:

  • Race
  • Color
  • National Origin
  • Religion
  • Sex
  • Familial Status
  • Disability

You are perfectly free to negotiate harder with someone you perceive to be wealthy than with someone you perceive to be less well off. You are not allowed to say "I don't want an African American family to move into my neighborhood so I'll charge twice as much to an African American buyer."

Now, as a practical matter, trying to discriminate by buyer wealth is unlikely to be beneficial. The market for any particular house is likely to be in roughly the same financial position-- there aren't a whole lot of homes that both appeal to and are affordable for both teachers and CEOs. You'll have some buyers that are stretching to afford the house and some that can afford it comfortably but it is unlikely that there is a huge difference in willingness to pay. If there is a particularly wealthy person looking at the house, it's likely that they're looking at it in order to rent it out or that they are very conservative with their money in which case they're likely to be a rather price sensitive buyer. The person driving a BMW and sporting a rolex is just as likely to be financially overextended.

From a seller's standpoint, you're far more likely to be able to negotiate a buyer up if the buyer has fallen in love with the house and is thinking emotionally rather than logically about the price. You might find that out if the potential buyer is excessively enthusiastic when looking at the house. That's the sort of buyer that is liable to get into a bidding war that drives up the price.

  • 1
    You are perfectly free to negotiate harder with someone you perceive to be wealthy than with someone you perceive to be less well off. Agree, but remember that wealthy people are usually financially savvy, the OPs plan is unlikely to work,
    – Mattman944
    Oct 21, 2019 at 0:22
  • "there aren't a whole lot of homes that both appeal to and are affordable for both teachers and CEOs" -- but the CEO may be interested in the house not to live in, but to complete a parcel for a large development (as in the movie Up). There may be signs, subtle or obvious, that the buyer is after the land on behalf of wealthy interests.
    – nanoman
    Oct 21, 2019 at 10:05
  • I'll also note that bidding wars aren't always something that happens. You may just get one offer over the course of a month. And people don't usually want to hold onto a property because it still generates upkeep and utility costs.
    – pboss3010
    Oct 21, 2019 at 11:56
  • "there aren't a whole lot of homes that both appeal to and are affordable for both teachers and CEOs" -- where I live, the respect for teachers is a lot higher. Also, where I live, teachers and CEOs could very well live near each other. Perhaps the CEO wants to spend money on something else than expensive housing...
    – juhist
    Nov 21, 2019 at 17:35

What you are really talking about is negotiating price. It is not illegal to ask for a higher price than you listed the home for based on what you believe the buyers are financially able to pay.

As a Realtor I can tell you that in some markets it's better to list the house UNDER market value to encourage a bidding war. This strategy typically results in people giving their highest and best offer rather than offering less than they are actually willing to pay.

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