Humber/Ontario Real Estate Course 4 Exam Practice

What influences appraiser opinions in case of reduced value due to a crime?

1. Could be attributed to a stigma

2. Applicable for recent past crimes only

3. No impact on market value assessments

4. Described more as detrimental than stigma

5. Relevant only to historic properties

6. Considered negligible on market evaluations

The correct answer is: Could be attributed to a stigma

The correct choice identifies that stigma can significantly affect an appraiser’s opinion in situations where a property's value is reduced due to crime. Stigmatization refers to the negative perception that buyers may hold towards a property if it has an association with criminal activity, even if that activity occurred in the past. This stigma can lead to a psychological impact on potential buyers, causing them to undervalue the property or avoid it entirely, thereby influencing appraisers who need to assess market value. When appraisers conduct their analyses, they take into account not only the physical attributes of a property but also the surrounding market conditions, including any reputational impacts caused by prior incidents. This awareness of stigma is increasingly important as buyers often seek more than just a good deal; they look for neighborhoods where they feel safe and welcome. Therefore, the implications of crime history can linger long after the incident, affecting perceptions and ultimately influencing appraisal values. In contrast, other options suggest that these effects are limited to recent events, negligible, or only applicable to specific property types, none of which encompasses the broader reality that past crimes can fundamentally alter how a property is perceived in the market.