Humber/Ontario Real Estate Course 3 Exam Practice

When a range of value is given by an appraiser, why is this acceptable in certain situations?

1. It's not acceptable; a single-point value is mandatory.

2. Acceptable for commercial properties only.

3. Acceptable when there are few comparables available.

4. Acceptable if the value range is within 1%.

The correct answer is: Acceptable when there are few comparables available.

A range of values provided by an appraiser is acceptable in certain situations primarily because of the limitations that may exist in finding suitable comparable sales. When there are few comparable properties available to accurately assess a single-point value, appraisers may rely on a range to account for the inherent uncertainties and variabilities in the real estate market. This approach allows for a more realistic representation of a property's worth when market data is limited or when differences in property features, conditions, and locations may significantly affect value. In cases where market activity is sparse, leveraging a range helps to acknowledge that valuing real estate is not an exact science. This range can provide a more nuanced understanding of potential market behavior, offering buyers and sellers better guidance amidst uncertainty in pricing. Such considerations are particularly relevant in unique, specialized, or transitional property types where standard pricing comparisons might not be feasible.