Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following statements is NOT correct regarding stigmatized properties?

1. Salespersons are required by law to disclose all stigmas to buyers.

2. A stigma's perceived risk can affect property value without a tangible problem.

3. Stigmas are intangible and difficult to quantify in terms of impact on value.

4. Stigmas can extend the time a property stays listed for sale.

The correct answer is: Salespersons are required by law to disclose all stigmas to buyers.

In real estate, stigmatized properties refer to those properties that have been negatively impacted by events or circumstances that are not necessarily related to their physical condition but rather to public perception. The correct statement is that salespersons are not legally required to disclose all stigmas to buyers, which is a critical aspect of understanding the obligations regarding disclosures in real estate transactions. While certain stigmas, such as a death occurring in the home or a notable crime, might influence a buyer's perception and potentially affect marketability, the law does not mandate sellers or their representatives to disclose every aspect of a property's history that could be considered "stigmatizing." This can lead to a complex situation where real estate professionals must navigate their ethical obligations while understanding the varied implications of such disclosures. Understanding the nature of stigmas is key: their perceived risk can indeed affect property value despite the absence of any direct tangible issues, which relates to the economic principle of perception influencing market behavior. Additionally, stigmas are intrinsically difficult to measure because they are based on subjective opinions and societal attitudes, thus making them intangible factors in property valuation. Furthermore, when a property is stigmatized, it often results in a prolonged listing period, as potential buyers may hesitate or avoid the property