Texas Real Estate State Practice Exam

What is the term for panic selling often associated with the practice of Blockbusting?

1. Broker Exclusive Agent but owner can sell

2. Court prevents the principal from denying that agency, agency by estoppel

3. Prohibits monopolies

4. Exclusive Agency

The correct answer is: Broker Exclusive Agent but owner can sell

The term commonly associated with panic selling as a result of blockbusting is not accurately reflected by the provided answer. Blockbusting is a practice where real estate agents induce homeowners to sell their properties under the pretense that people of a different race or ethnicity are moving into the neighborhood, leading to a sense of fear among current residents about a decline in property values. This creates a frenzy where homeowners might sell their properties hastily, often at lower prices, to avoid perceived losses—this phenomenon is often referred to as "panic peddling" rather than panic selling specifically. The correct understanding would highlight that this practice exploits racial fears and may involve unethical tactics to create a sense of urgency for homeowners to sell. It is crucial to acknowledge that this type of behavior is considered illegal and discriminatory under fair housing laws. In this sense, recognizing how blockbusting manipulates market perceptions and induces quick, often irrational selling is key to understanding its implications on the real estate market and the communities affected.