National Real Estate Exam (PSI)Practice of Real EstateMedium
An agent tells a homeowner that property values will decline because a minority family recently moved into the neighborhood, urging the homeowner to sell quickly. This is an example of:
- ABlockbusting
- BRedlining
- CPuffing
- DSteering
Show answer & explanationAnswer & explanation
Correct answer: A. Blockbusting
Blockbusting occurs when someone induces owners to sell by suggesting that the entry of a protected class into the neighborhood will lower property values or increase crime. This is illegal under the Fair Housing Act.
Why the other options are wrong
- B. Redlining involves lenders denying services based on area demographics.
- C. Puffing is exaggerated but non-actionable sales talk, unrelated here.
- D. Steering involves directing buyers, not inducing owner panic sales.
Blockbusting
Inducing homeowners to sell by suggesting protected-class individuals moving into the area will harm property values.
- Illegal under Fair Housing Act
- Also called 'panic peddling'
- Preys on racial/ethnic fears to generate listings
Memory trick: Blockbusting 'busts' the block by scaring owners into selling