Real Estate Real Estate Law & Regulations 1

Question 1

Blockbusting is an illegal practice in which real estate agents:

Accepted Answer

Induce homeowners to sell by suggesting minority groups are moving in, causing property values to decline

Answer

Blockbusting (panic peddling) involves inducing white homeowners to sell cheaply by implying that minority residents moving in will lower property values — a Fair Housing Act violation.

Question 2

Steering in real estate refers to an agent's illegal practice of:

Accepted Answer

Directing buyers toward or away from neighborhoods based on protected class characteristics

Answer

Steering is the illegal act of channeling prospective buyers or renters toward or away from certain neighborhoods based on their race, religion, national origin, or other protected characteristics.

Question 3

Redlining is an illegal discriminatory practice in which lenders:

Accepted Answer

Deny or limit loans in minority neighborhoods based on race or national origin

Answer

Redlining is the discriminatory practice of refusing to extend credit or insurance to residents in specific geographic areas based on racial or ethnic composition.

Question 4

The primary role of a title company in a real estate transaction is to:

Accepted Answer

Search title records, issue title insurance, and facilitate closing

Answer

A title company searches public records to verify clear title, identifies any defects or encumbrances, and issues title insurance to protect buyers and lenders.

Question 5

Owner's title insurance protects the:

Accepted Answer

Buyer's equity against title claims arising from pre-existing defects

Answer

Owner's title insurance protects the buyer's equity and ownership interest against title defects, liens, or encumbrances that existed prior to the purchase.

Real Estate Practice Test

Real Estate Practice Test

Real Estate Real Estate Law & Regulations 1