Humber/Ontario Real Estate Course 2 Exam Practice

In terms of stigmatized properties, what impact could a past crime have on market value?

1. Could be attributed to stigma lowering the value.

2. Would not affect the market value at all.

3. Would only affect the value if the crime occurred recently.

4. No longer considered a factor by modern appraisers.

5. Is treated legally as a condition rather than a stigma.

6. Depend entirely on the severity and publicity of the crime.

The correct answer is: Could be attributed to stigma lowering the value.

In the context of stigmatized properties, a past crime can indeed have an impact on the market value of a property. Such properties may have a stigma attached to them due to events that occurred there, which can deter potential buyers and reduce the property's desirability. Buyers may associate negative emotions or beliefs with the property, influencing their willingness to pay for it. This stigma can lead to a decrease in the property's market value. It's important for real estate professionals to be aware of these factors when dealing with stigmatized properties. Option B is incorrect because past crimes can indeed influence the market value of a property. Option C is not entirely accurate as the impact of a past crime on market value is not solely dependent on when the crime occurred. Option D is incorrect as past crimes are still considered a relevant factor by appraisers. Option E is also incorrect as a past crime's impact on market value is generally viewed as a stigma rather than a physical condition of the property. Option F, while somewhat relevant, does not cover the direct impact of stigma on market value as option A does.