Humber/Ontario Real Estate Course 2 Exam Practice 2026 - Free Real Estate Practice Questions and Study Guide

Option D is correct because few recent comparables can indeed severely limit the validity of the direct comparison approach in real estate valuation. Having a limited number of recent comparable sales can make it challenging to accurately determine the market value of the subject property. Without recent and relevant comparables, it becomes difficult to make appropriate adjustments and arrive at a precise valuation. This underscores the importance of having a sufficient number of recent comparable sales to ensure the accuracy of the direct comparison approach.

Options A, B, C, E, and F are incorrect:

A: A time adjustment may still be necessary even if the sale occurred less than five weeks ago since market conditions can change rapidly.

B: A good comparable should ideally be at arm's length, meaning the parties involved should not have a close relationship or vested interest in the transaction.

C: If a feature in the comparable property is better than the subject property, a negative adjustment is typically made, not a plus adjustment.

E: A historic property may not always make a good comparable, as its unique characteristics and age may not be directly comparable to the subject property.

F: Comparable properties should not only be similar in age and style but also in location, size, condition, and other relevant factors for a more accurate valuation.