Humber/Ontario Real Estate Course 2 Exam Practice

When estimating a property's market value, which characteristic does NOT define a good comparable property?

1. Bona fide arm's length transaction.

2. High comparability to the subject property.

3. Located in a distant neighborhood within the same city.

4. Transaction date close to the valuation date.

5. Similar size and age.

6. Similar upgrades and features.

The correct answer is: Located in a distant neighborhood within the same city.

When estimating a property's market value, it is essential to use comparable properties that are as similar as possible to the subject property. The choice that does not define a good comparable property is located in a distant neighborhood within the same city (Option C). Choosing comparable properties in a different neighborhood can introduce differences in factors such as location desirability, neighborhood amenities, and property demand, which can significantly impact the property's value and make accurate comparisons challenging. It is crucial to select properties that closely resemble the subject property in terms of location, size, age, amenities, upgrades, and transaction date to obtain a reliable estimate of market value.