What illegal activity occurs when a licensee suggests that neighbors sell their homes due to a new group home opening nearby?

The correct answer is block-busting, which refers to the practice where real estate agents encourage property owners to sell their homes at lower prices by provoking fears about changes in the neighborhood, such as the opening of a group home. This practice exploits racial, ethnic, or social prejudices and instills panic among homeowners, leading them to believe their property values will decrease.

In Michigan and other jurisdictions, block-busting is illegal because it perpetuates discrimination and undermines the stability of communities. By suggesting neighbors sell their homes based on the presence of a new group home, the licensee is manipulating the fears and perceptions of the community to prompt sales, which embodies the essence of block-busting.

Other terms related to real estate practices, such as redlining, panic selling, and steering, refer to different types of discriminatory or unethical behaviors in the real estate market. Redlining involves refusing to lend to people in certain neighborhoods based on racial or ethnic demographics. Panic selling describes a scenario where homeowners rush to sell their properties due to unfounded fears, often instigated by outside influences. Steering refers to the practice of guiding homebuyers towards or away from certain neighborhoods based on their race or other protected characteristics. Each of these practices violates fairness in real