Humber/Ontario Real Estate Course 2 Exam Practice

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Prepare for the Ontario Real Estate Exam with our comprehensive Humber Course 2 Exam Practice quiz. Engage with multiple choice questions and detailed explanations, designed to help you excel.

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Appraiser Edwards emphasizes a $397,000 sale two weeks ago, but previous six-month-old sales range between $430,000 and $470,000 in a stable market. Which statement is correct?

  1. Edwards should average this sale with others from six months ago

  2. Edwards should ignore this sale and rely on previous sales

  3. Edwards should investigate further as this sale may not be at arm's length

  4. Edwards should put most weight on this sale, as it is the latest transaction

  5. Edwards should disregard all earlier sales

The correct answer is: Edwards should investigate further as this sale may not be at arm's length

In this scenario, the correct statement is that Edwards should investigate further as this sale may not be at arm's length. This is the most appropriate course of action because the sale of $397,000 stands out significantly compared to the previous six-month-old sales that ranged between $430,000 and $470,000 in a stable market. The term "arm's length" refers to a transaction where the parties involved are independent and act in their own self-interest to make decisions. If a sale is not at arm's length, it means that there may be external influences or special circumstances affecting the sale price, which could result in an inaccurate reflection of the property's market value. Therefore, in this case, investigating further is crucial to ensure the accuracy and validity of the appraisal process.

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