Humber/Ontario Real Estate Course 4 Exam Practice

Which situation might indicate a favorable condition for selling property?

1. Lower interest rates on mortgages.

2. Higher unemployment numbers in the local community.

3. Greater supply of comparable homes for sale in the area.

4. Reduced demand for residential properties.

5. Rise in property tax rates.

6. Increasing inflation rates.

The correct answer is: Lower interest rates on mortgages.

Lower interest rates on mortgages create a favorable condition for selling property because they make borrowing cheaper for potential buyers. When interest rates are lower, monthly mortgage payments decrease, allowing more people to afford homes. This can lead to an increase in buyer activity and competition in the market, potentially driving up property prices. Additionally, a higher number of buyers actively seeking homes can shorten the time a property remains on the market and help sellers achieve better sales outcomes. In contrast, higher unemployment numbers, increased supply of homes, reduced demand for residential properties, rising property tax rates, and increasing inflation rates are generally indicators of a less favorable market for selling, as they can deter buyers, lower prices, or increase the holding costs associated with property ownership.