Illinois Leasing Agent Practice Exam

What is another name for the practice of blockbusting?

1. Price gouging

2. Panic peddling

3. Home flipping

4. Property speculation

The correct answer is: Panic peddling

Blockbusting is often referred to as panic peddling because it involves instilling fear among homeowners to encourage them to sell their properties. The practice typically occurs when real estate agents or developers suggest that a change in neighborhood demographics will lead to a decline in property values, prompting current residents—often homeowners of the original demographic—to sell their homes at lower prices. Consequently, this creates opportunities for new buyers, often investors, to purchase properties at these reduced prices, thus capitalizing on the panic created. This term accurately captures the essence of the practice, as it emphasizes the manipulative tactics used to exploit community dynamics and homeowner fears. The other options do not reflect the specific nature of blockbusting; price gouging relates to excessive pricing during emergencies, home flipping pertains to buying and selling properties for profit without the underlying fear aspect, and property speculation involves assessing potential future value rather than manipulating current homeowners' fears.