Humber/Ontario Real Estate Course 3 Exam Practice

Which quality is NOT essential for a property to be a good comparable when estimating market value?

1. Bona fide arm's length transaction.

2. Highly comparable to the subject property.

3. In a distant neighborhood within the same city.

4. Recently transacted at or near the valuation date.

5. Currently vacant and available for viewing.

6. Similar architectural style and structure.

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

In real estate, when selecting properties as comparables to estimate market value, it is crucial for the comparables to closely resemble the subject property. The comparables should be highly comparable in various aspects such as size, age, condition, location, and other relevant factors. Therefore, choice B is an essential quality for a property to be a good comparable. A bona fide arm's length transaction (Choice A) is necessary to ensure that the transaction price represents fair market value without any undue influence. Choice D, being recently transacted at or near the valuation date, is important as it reflects current market conditions accurately. Choice E, being currently vacant and available for viewing, allows for a thorough assessment of the property. On the other hand, choice C states that the property should be in a distant neighborhood within the same city. This is not ideal when selecting comparables as the location factor plays a significant role in determining market value. Properties in the same or similar neighborhood as the subject property are usually preferred because they are subject to similar market influences. Therefore, choice C is NOT essential for a property to be a good comparable, making it the correct answer.