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

What is another term used for blockbusting?

1. Panic selling

2. Market manipulation

3. Discriminatory advertising

4. Subprime lending

The correct answer is: Panic selling

Blockbusting is a practice in real estate where agents or brokers induce homeowners to sell their properties quickly at reduced prices by creating a fear of change in the neighborhood, often based on the imminent arrival of new racial or ethnic groups. This term is synonymous with panic selling because it plays on the emotions of homeowners, convincing them that their property values will decline due to these changes, prompting them to sell hastily. The other terms listed represent different concepts. Market manipulation typically refers to illegal practices that artificially affect the supply, demand, or price of assets. Discriminatory advertising involves promoting properties in ways that could foster inequality or discrimination but does not encapsulate the urgency created in blockbusting. Subprime lending refers to lending to borrowers with poor credit histories, which is unrelated to the real estate practice of inducing sales through fear. Thus, panic selling effectively captures the essence of blockbusting, making it the correct answer.