What illegal conduct is committed when a licensee informs subdivision owners about a new group home in order to encourage property sales?

Block-busting occurs when real estate professionals persuade property owners to sell their homes by instilling fear that the demographic makeup of their neighborhood will change—often through the introduction of a group home or other community facilities. This practice exploits racial or socioeconomic anxieties, manipulating sellers into believing that their home values will decline if individuals from certain groups move in.

In the context of the question, when a licensee informs subdivision owners about a new group home with the intent of encouraging them to sell, it reflects the core elements of block-busting. It implies a suggestion that property values might decrease due to the presence of the group home, leading homeowners to sell quickly out of fear—a clear violation of ethical practices in real estate.

Other options like redlining, steering, and panic selling refer to different unethical practices. Redlining pertains to discriminatory practices where lenders refuse services based on the racial or ethnic composition of a neighborhood. Steering involves guiding clients towards or away from certain neighborhoods based on race or ethnicity, and panic selling relates to encouraging a rapid sale under duress or fear of market changes without the manipulative aspect of demographics. However, block-busting directly aligns with the actions described in the question.