Blockbusting: 'they're moving in, sell now cheap' — panic selling for profit
Before you read
Test yourself first: 5 questions
Question 1 of 5
Inducing owners to sell by suggesting members of a protected class are moving into the neighborhood is the illegal practice of:
Answer: A. Blockbusting (panic selling) is illegal. Steering channels buyers by protected class; redlining denies lending/insurance by area.
Question 2 of 5
'Panic peddling' is another name for:
Answer: A. Panic peddling = blockbusting: inducing sales by stoking fear that a protected group is moving in.
Question 3 of 5
Inducing owners to sell or rent by suggesting that people of a particular protected class are moving into the area is known as:
Answer: B. Blockbusting, also called panic peddling, is inducing sales by representing that protected-class persons are entering the neighborhood; it is illegal.
Question 4 of 5
An agent tells homeowners that minority families are moving into the area and that they should sell now before property values drop. This practice is called:
Answer: C. Blockbusting (also called panic selling) is inducing owners to sell by suggesting that the entry of a protected class into the neighborhood will lower property values.
Question 5 of 5
Which of the following is the clearest example of illegal blockbusting?
Answer: B. Soliciting listings by playing on fear that a protected class is entering the neighborhood and will reduce values is the textbook definition of blockbusting.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Steering: guiding buyers toward/away from areas by protected class — let THEM choose
- Blockbusting: 'they're moving in, sell now cheap' — panic selling for profit
- Redlining: lenders refusing loans by NEIGHBORHOOD demographics
- All three are per-se violations — no intent excuse
- Testers from HUD are legal and their evidence stands up
Steering · Blockbusting · Redlining: FAQs
Is Steering · Blockbusting · Redlining on the real estate exam?
Yes. Fair Housing & Ethics is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
