Humber/Ontario Real Estate Course 3 Exam Practice

Which factor is most influential when determining the market value of a property?

1. The historical sale prices in the same neighborhood.

2. The listing price of competitive properties.

3. The assessed value of the property for tax purposes.

4. The appraiser's subjective opinion.

5. The willingness of potential buyers to make offers.

6. The recent selling prices of similar properties.

The correct answer is: The recent selling prices of similar properties.

The recent selling prices of similar properties provide the most relevant and objective data points to determine the market value of a property. This approach is rooted in the concept of "comparative market analysis," which evaluates how similar homes in the same area have sold in a recent timeframe. It reflects current market conditions, buyer demand, and the value buyers are willing to pay, which are crucial for establishing a realistic market value. Using recent selling prices allows agents, appraisers, and buyers to gauge how a property stacks up against comparable properties. This is pivotal because market value is ultimately determined by what buyers are willing to spend, anchored in real transactions rather than hypothetical or subjective assessments. Other factors, while relevant, do not have the same direct impact on market value. For instance, historical sale prices may indicate trends but could be outdated. Listing prices offer an idea of what sellers hope to achieve, but they do not reflect actual sale transactions. The assessed value typically serves for taxation purposes and may not align with true market conditions. An appraiser's subjective opinion can vary based on individual perspectives and expertise and may not be consistent with market realities. Finally, potential buyers' willingness to make offers is influenced by various conditions and sentiments rather than a definitive measure of value.