Freehold
Study guide
This topic covers how licensees must behave: fair housing law, antitrust rules, and honest advertising. Expect scenario questions asking you to name the violation — steering, blockbusting, redlining, or illegal commission fixing. Know the seven federal protected classes cold, including which classes are NOT federally protected, and remember that commission rates are always negotiable. These questions reward precise vocabulary, and this unit gives you exactly that.
Key vocabulary: Practice of Real Estate glossary (15 terms)
Every Freehold question shows why the right answer is right — and cites its source.
Which of the following is NOT a protected class under the federal Fair Housing Act?
Age — The federal Fair Housing Act protects race, color, religion, national origin, sex, familial status, and disability. Age is not a federal protected class, though some state and local laws add it.
Source: Federal Fair Housing Act (42 U.S.C. §3604)
Encouraging homeowners to sell by suggesting that people of a particular protected class are moving into the neighborhood is known as:
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)
An agent who shows minority buyers homes only in certain neighborhoods based on their protected class is engaging in:
Steering — Steering is channeling homebuyers toward or away from neighborhoods based on a protected class, limiting their housing choices. It violates the federal Fair Housing Act even when done with good intentions.
Source: Federal Fair Housing Act (42 U.S.C. §3604)
A lender who refuses to make loans in certain neighborhoods based on their racial composition is engaging in:
Redlining — Redlining is denying or limiting loans, insurance, or services in specific areas because of the residents' protected characteristics rather than applicants' qualifications. It is prohibited by fair housing and fair lending laws.
Source: Federal Fair Housing Act (42 U.S.C. §3605)
Two competing brokerages agree to charge the same minimum commission rate. This is:
Illegal price fixing under antitrust law — Agreements between competing brokerages to set commission rates constitute price fixing, a per se violation of the Sherman Antitrust Act. Each brokerage must set its fees independently, and rates are always negotiable.
Source: Sherman Antitrust Act (15 U.S.C. §1)