Texas Crammer Practice Exam

Which of the following best defines "blockbusting" in real estate?

1. Encouraging homeowners to sell due to neighborhood changes

2. Restricting home sales to certain demographics

3. Offering inflated deals to buyers

4. Segregating real estate listings

The correct answer is: Encouraging homeowners to sell due to neighborhood changes

Blockbusting is best defined as the practice of encouraging homeowners to sell their properties by instilling fear or panic about changes in the neighborhood, particularly the arrival of certain demographic groups. This method often exploits racial, ethnic, or socio-economic shifts to persuade current residents to sell at reduced prices, under the pretense that their property values will decline as a result of these changes. Real estate agents or companies engaging in blockbusting may falsely suggest that prospective buyers will not want to move into the neighborhood, thereby creating a sense of urgency among existing residents to sell before their home values drop. The other options address different concepts within real estate practices. Restricting home sales to certain demographics involves discriminatory practices that violate fair housing laws, while offering inflated deals to buyers would generally relate to deceptive sales practices rather than the specific manipulation involved in blockbusting. Segregating real estate listings does not capture the essence of blockbusting, which is focused more on creating pressure for homeowners to sell based on perceived threats to their property's value.