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A broker contacts homeowners, attempting to list their property with him, because the earning and values may drop due to coming group home for special adults?

a. redlining
b. Blockbusting
c. steering
d. no problem

1 Answer

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Final answer:

The broker's actions in the scenario are an example of blockbusting, an unethical real estate practice aimed at persuading homeowners to sell their homes by suggesting that a new group home for special adults will devalue their properties.

Step-by-step explanation:

The behavior of the broker in the scenario described is an example of blockbusting. This unethical practice involves a real estate broker or speculator attempting to scare homeowners into selling their property by suggesting that the arrival of a specific group of people, such as a minority group or in this case, adults with special needs, will lead to a decrease in property values. Historically, blockbusting was used to induce white flight, where misleading tactics prompted white homeowners to sell their homes at below-market prices out of fear. After purchasing these homes, real estate agents would then sell them at inflated prices to minority families seeking housing in primarily white neighborhoods.

Redlining refers to the discriminatory practice where financial institutions would designate certain neighborhoods, typically those with racial and ethnic minorities, as high-risk for lending, thereby denying loans or charging higher rates. Steering, on the other hand, involves guiding prospective homebuyers towards or away from certain neighborhoods based on their race or ethnicity, which perpetuates segregation. The scenario described, however, fits the definition of blockbusting and not redlining or steering and is considered an unethical and illegal practice in real estate.

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