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Redlining, Steering, Panic Peddling, Blockbusting | Real Estate Exam Prep - YouTube
Channel: The Real Estate Classroom
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in this video we're going to discuss
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four
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key real estate terms specifically
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fair housing terms that you absolutely
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have to know
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for your licensing exam all of that in
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this video
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hey everybody my name is paul vachesky
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and welcome to the real estate classroom
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youtube channel hey real quick before we
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get started do me a favor give this
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subscribe
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and if you have a question or you would
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like to leave a comment put it down
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below in the comment section i would
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appreciate that
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all right in today's video we're going
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to be discussing four key terms that you
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have to know for your real estate
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licensing exam the first one is
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redlining what is redlining well
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redlining comes from what we call the
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home mortgage
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disclosure act of 1975. now as i said in
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a previous video
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it's very important because the you have
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to know the dates of these laws because
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the the real estate licensing exam
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loves to ask when certain laws were
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enacted
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so the home mortgage disclosure act was
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enacted in 1975 so
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there's a there is a a possibility that
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that question can be on your licensing
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exam number two the home mortgage
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disclosure act created
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uh a situation where redlining was
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declared
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discriminatory in nature therefore it's
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illegal now what is redlining
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well the best way to describe it is
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you would walk into a bank prior to this
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law
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and they would actually have a map on
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the wall of the bank
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and there would be certain areas of town
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that literally someone took a red marker
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and
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outlined that area in that red marker
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and within that area the bank would not
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provide
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home loans to to residents within that
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area
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and and what ended up happening is those
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redlined areas were
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high high-density population minority
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groups like african-americans latinos
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etc
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and so it was discriminatory practice
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that was legal
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and was done all the time by lenders
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until
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the home mortgage disclosure act was
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passed in 1975 and made it
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illegal now the second key fair housing
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real estate term you have to know is
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what's called blockbusting
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now blockbusting is the practice of
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persuading a homeowner to sell
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their property and sell their property
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cheaply
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all right because the fear of minority
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groups coming
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into the neighborhood or being in a
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nearby neighborhood
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and so essentially what would happen is
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i would go knock on the door
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of a seller in a particular particular
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neighborhood
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and i would say hey next door the
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neighborhood next door has a lot of
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african-americans latinos whatever the
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case may be
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and they're starting to infiltrate into
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your neighborhood
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and it's gonna basically crash your
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market
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here your market values so i'll tell you
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what
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be let's let's get you out of your home
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before that happens so i would offer to
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buy their
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their property cheap and then as soon as
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i closed i would turn around and sell it
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for a higher price and therefore i would
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make a profit so the key
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to remember to blockbusting is number
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one
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i buy the property cheaper and then sell
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it for a proper
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a profit at a higher price that is the
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key
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to uh blockbusting now the third fair
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housing term that we have to know for
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the real estate licensing exam is what's
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called panic pedaling now it looks
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somewhat like blockbusting but there are
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some
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distinct differences remember
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blockbusting is
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telling people minorities are moving in
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then i buy the property cheap
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and then sell it for or resell it for a
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higher price therefore making a profit
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now panic pellet pedaling is where i the
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agent i would go to a homeowner knock on
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the door and say hey by the way
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uh just fyi there's a lot of minorities
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moving into this neighborhood or another
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one that was used a lot is
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there's low-income housing coming into
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this neighborhood
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and and the residents of those
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low-income housing
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units are minorities and if you don't
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move
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soon your property values are going to
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plummet because of that so
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let's get your property listed for sale
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let's sell it let's get you out of this
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neighborhood before
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you lose your equity when the market
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values
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tank that is panic pedaling we are
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we are inducing that homeowner through
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panic
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that uh to sell their home and oh by the
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way i'm a licensed real estate
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professional and i can help you do that
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that is
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panic pedaling now the fourth and final
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key fair housing term you have to know
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is called
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steering and steering is not really
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uncommon because steering is a situation
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that happens
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unintentionally and many times steering
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happens with good intentions but it's
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still illegal and let me give you an
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example of where we would see
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steering in in the sales side of real
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estate so i'm in ohio nebraska
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and statistically according to the
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census the largest
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population density of african americans
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they live north of dodge street in east
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of 120th street
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we call it north omaha that's that's
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just
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factual so let's say that i'm a real
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estate professional and i'm working with
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a
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an an african-american couple they've
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already seen the lender they got great
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credit they qualified
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for 250 000 they have a va loan
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uh they're ready to go they come to me
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and say paul let's
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find me a house so i only show them
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homes
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in north omaha only homes north of dodge
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and east of 120th street
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because i just assume because they're
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african-american
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they're going to want to live in an
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african-american community
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so i assume that is steering
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now the way that we uh we prevent that
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from happening is
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i get the cr i find out what their
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financial situation is how much they can
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afford and what type of loan and then i
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just show them or offered
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i just provide them the list of every
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home in omaha that's for sale
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that uh was within that within the the
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home loan criteria
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and then let them tell me which homes
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individually they want to see
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now where we see steering in the
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property management community is
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let's say for example we have a your
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property manager of a hundred unit
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apartment community and this community
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does have a playground
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and so you have six seven eight you know
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units for rent that are available
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because they're vacant
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and you have a family with children that
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come in
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and and you just assume because this
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family has children they're they're
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going to want to live on the ground
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floor next to
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the playground equipment you just assume
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that that is steering
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you're basically assuming where they
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want to live now
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how do we prevent that you simply say
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here are the 678
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vacancies that we have in the community
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which one do you want to see
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and that's how we we protect ourselves
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from steering when you get into the real
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practitioner of real estate
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we're all about efficiencies anyways so
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assuming anything in this industry is is
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not good
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assuming where someone wants to leave
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assuming that they're going to qualify
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for a loan
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we never assume that let's get them over
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to a lender to to see what they qualify
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for
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if they qualify at all we don't make
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assumptions we
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we do things based on fact all right so
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those are four key real estate terms
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again
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uh steering panic pedaling uh
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block busting and redlining those four
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you have to know commit them to memory
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because there's a high probability
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you're going to have those on
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your real estate licensing exam all
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right that's all i got for today's video
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if you're going to continue your studies
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