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?