Humber/Ontario Real Estate Course 4 Exam Practice

To accurately determine market value using the direct comparison approach, which factor must remain constant?

1. Age of properties being compared.

2. Condition of properties.

3. Date of sale of comparable properties.

4. Lot size of properties.

5. Quality of construction materials.

6. Similar neighborhood features.

The correct answer is: Date of sale of comparable properties.

In the context of the direct comparison approach to determining market value, the date of sale of comparable properties must remain constant to ensure that the comparison is relevant and accurate. The real estate market can fluctuate due to various factors, such as changes in economic conditions, interest rates, or local demand. By controlling for the date of sale, appraisers can adjust for temporal differences and make more reliable comparisons between properties. Using recent sales data helps ensure that the comparables reflect current market conditions. If the date of sale varies significantly, it can lead to inaccuracies, particularly in a volatile market where values can change over time. Hence, having a consistent timeframe for the sales data allows for a more precise analysis of how properties relate to one another in value. The other factors, while important for comparison, do not maintain the same level of critical importance in the evaluation process as the date of sale. The age, condition, lot size, quality of construction materials, and similar neighborhood features all play a role in determining value but can vary among properties without completely undermining the validity of the market value assessment if the date of sale is aligned.