A broker tells owners on a block that 5 families of a particular background have moved in and values will fall. If the broker makes these claims to induce listings for profit and the background is a protected characteristic, what discriminatory practice is illustrated?
Correct Answer
B) Blockbusting: inducing a sale by claims about who is moving in
B. The profit-motivated inducement illustrates blockbusting. The broker links protected-class entry to falling values to induce listings for profit. The rule covers attempted inducement; an actual sale or realized profit is not required. Scope and exceptions: Not every statement about neighborhood change is blockbusting. The protected-class representation, inducement to sell or rent, and profit purpose matter. Source: 24 CFR 100.85(a)–(c) — https://www.ecfr.gov/current/title-24/subtitle-B/chapter-I/part-100/subpart-B/section-100.85
Why This Is the Correct Answer
B. The profit-motivated inducement illustrates blockbusting. The broker links protected-class entry to falling values to induce listings for profit. The rule covers attempted inducement; an actual sale or realized profit is not required. Scope and exceptions: Not every statement about neighborhood change is blockbusting. The protected-class representation, inducement to sell or rent, and profit purpose matter.
Why the Other Options Are Wrong
Option A: Blockbusting only where the broker lists 3 or more of those homes
There is no three-listing minimum.
Option C: Permitted market commentary, since values are a matter of opinion
Calling the pitch an opinion does not remove its discriminatory inducement.
Option D: Permitted, because the 5 families named did in fact move in
Actual entry does not excuse using it for the prohibited purpose.
Exam Tip
Recognize discriminatory fear-based sales inducement, not merely demographic discussion.
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