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Blockbusting is a sneaky and illegal way some people used to make money in real estate. They would scare homeowners into thinking that their neighborhood was going to change in a bad way because people of a different race, religion, or background were moving in. The scared homeowners would then sell their homes quickly and at a lower price. The blockbusters would buy these homes and sell them to the new people moving in at a higher price, making a profit.
For example, a real estate agent might spread rumors that a certain group of people was moving into a neighborhood, and that this would cause home prices to go down. Scared homeowners would sell their homes at low prices to the agent, who would then sell the homes to the new residents at a higher price, making money off of the fear they created.
"A Deep Dive for Real Estate Agents and Appraisers"
Here are a few more points that might be beneficial for your real estate agent and appraiser exams:
Fair Housing Act: Blockbusting is prohibited by the federal Fair Housing Act of 1968 in the United States. This law was established to eliminate housing discrimination based on race, color, religion, sex, or national origin.
Panic Selling/Panic Peddling: Blockbusting is sometimes referred to as "panic selling" or "panic peddling," as it involves inciting panic or fear among homeowners that their property values will decrease.
Ethics and Penalties: Besides being illegal, blockbusting is also considered highly unethical. Real estate agents who are found guilty of blockbusting can face severe penalties, including hefty fines and loss of their real estate license.
Awareness: As a real estate agent or appraiser, it's crucial to understand and recognize blockbusting if you see it.
Understanding these concepts will ensure that you not only pass your exams but also act ethically and professionally in your future career in real estate.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In a land where houses were happy and bright,
A sneaky trickster came in the night.
They whispered of change, they planted the seed,
That new folks were coming, with different creed.
The homeowners trembled, they wanted to flee,
They sold their homes fast, as quick as can be.
The trickster then grinned, his profit was near,
He sold to the newcomers, who had nothing to fear.
Blockbusting, oh blockbusting, it's wrong and it's sly,
But it happened back then, we can't deny.
Now laws are in place, to keep things just right,
So neighborhoods stay fair, both day and night.