Humber/Ontario Real Estate Course 2 Exam Practice

When a buyer believes the smallest house on the street offers the best value, they are relying on which principle of value?

1. Conformity

2. Progression

3. Regression

4. External Factors

5. Supply and Demand

6. Highest and Best Use

The correct answer is: Progression

When a buyer believes that the smallest house on the street offers the best value, they are relying on the principle of Progression. This principle states that properties tend to increase in value when surrounded by other properties of higher value. In this case, the buyer perceives value in the smaller house due to its location in a neighborhood with larger, more expensive homes, assuming that the value of their property will increase over time due to the surrounding higher-value properties.