Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In which scenario would a property owner be more likely to engage in blockbusting?

1. When property values are expected to rise.

2. When there is news of demographic changes in the neighborhood.

3. When a property has been heavily renovated.

4. When the local economy is thriving.

The correct answer is: When there is news of demographic changes in the neighborhood.

A property owner is more likely to engage in blockbusting during a scenario where there is news of demographic changes in the neighborhood due to the nature of this practice, which leverages fear and speculation to influence property sales. Blockbusting involves convincing homeowners to sell their properties by suggesting that certain demographics are moving into the area, leading to a perceived decline in property values. In the case of demographic shifts, property owners might feel pressured to sell quickly to avoid a drop in their property's value, thus creating a sense of urgency. This practice targets the anxiety homeowners may feel about losing their investment or the changing nature of their community. While rising property values, heavily renovated homes, and a thriving local economy could indicate a healthy real estate market, these factors do not typically create the same type of fear that demographic changes might elicit. A stable or positive market environment would generally reduce the motivation for blockbusting, as homeowners are less likely to feel the need to sell hastily.