The illegal practice of guiding homebuyers toward or away from neighborhoods based on a protected class.
Why Steering matters on the exam
This term belongs to Practice of Real Estate. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Steering
Every Freehold question shows why the right answer is right — and cites its source.
Why do real estate licensees generally avoid personally researching and reporting sex-offender registry information to clients?
Because the registry information is sealed by federal law and made unavailable to members of the public
Because state license law strictly and directly forbids licensees from mentioning that the registry exists
Because such information is treated as immaterial to a buyer's purchasing decision
Doing so risks providing inaccurate information and can raise steering or fair housing concerns
Show answer & explanation
Doing so risks providing inaccurate information and can raise steering or fair housing concerns — Personally researching or summarizing offender data creates risk of error and potential fair-housing or steering implications, so best practice is pointing clients to the official registry to review themselves.
Source: PSI National Real Estate Exam Content Outline §6 Property Disclosures
The illegal practice of a lender refusing to make loans, or limiting loan terms, in certain neighborhoods based on the racial or ethnic composition of the area is known as:
Redlining
Blockbusting
Steering
Panic peddling
Show answer & explanation
Redlining — Redlining is the discriminatory practice of denying or limiting financial services, such as loans and insurance, to residents of particular areas based on race or ethnicity rather than creditworthiness.
Source: PSI National Real Estate Exam Content Outline §4 Financing
Encouraging homeowners to sell by suggesting that people of a particular protected class are moving into the neighborhood is known as:
Steering
Redlining
Blockbusting
Puffing
Show answer & explanation
Blockbusting — Blockbusting, also called panic selling, is inducing owners to sell by representing that persons of a protected class are entering the area. It is illegal under the federal Fair Housing Act.
Source: Federal Fair Housing Act (42 U.S.C. §3604)
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