Humber/Ontario Real Estate Course 3 Exam Practice

What criteria should an appraiser consider when selecting a comparable property for a four-bedroom, two-storey home?

1. Be difficult to find if the real estate market in Anycity and, more particularly, Fairview Heights was very active.

2. Optimally be a nearby four-bedroom, two-storey property that sold two weeks ago and was physically similar to the subject property.

3. Would be any sold residential property located in Fairview Heights that was within a two block radius of the subject property.

4. Be very easy to locate if the Anycity market was declining due to downward economic pressures.

The correct answer is: Optimally be a nearby four-bedroom, two-storey property that sold two weeks ago and was physically similar to the subject property.

The correct approach for an appraiser when selecting comparable properties is to focus on those that are as similar as possible to the subject property. This means prioritizing a nearby four-bedroom, two-storey property that has recently sold, ideally one that closely resembles the subject in terms of physical characteristics. The recency of the sale—like being sold two weeks prior—ensures that the pricing reflects current market conditions. This approach enhances the reliability of the appraisal as it provides a solid basis for comparison based on key attributes that affect home value. In this context, selecting comparables merely based on location or the ease of finding them does not ensure that the properties have similar features or market conditions, making them less reliable for accurate valuation. Hence, focusing on similar specifications, recent sales, and a close location synergistically supports the accuracy of the appraisal process.