Illinois Leasing Agent Practice Exam

What does the term "blockbusting" refer to?

1. Manipulating property values

2. Inducing sales by exploiting racial fears

3. Charging inflated rates for loans

4. Restricting access to neighborhoods

The correct answer is: Inducing sales by exploiting racial fears

The term "blockbusting" refers to practices where real estate agents provoke homeowners to sell their properties at lower prices by instilling fears about the changing racial or ethnic composition of their neighborhoods. This tactic often involves the suggestion that the arrival of minority groups will lead to a decline in property values, prompting current residents to sell quickly. Subsequently, the real estate agents can then resell these properties at a much higher price, capitalizing on the panic they created. This unethical manipulation primarily seeks to exploit racial fears for profit and has been a significant issue in the history of housing discrimination. Understanding this concept is essential for anyone involved in real estate because it highlights the importance of ethical practices in the industry and the legal frameworks in place to prevent such discriminatory actions.