Humber/Ontario Real Estate Course 2 Exam Practice

What must an appraiser consider when a buyer requests the addition of an insurability condition?

1. The current mortgage underwriting standards

2. The age, condition, and location of the property

3. The seller's past insurance claims

4. The buyer's credit score

5. The prior inspection reports

6. The neighborhood demographics

The correct answer is: The age, condition, and location of the property

When a buyer requests the addition of an insurability condition, one of the most critical factors for an appraiser to consider is the age, condition, and location of the property. This information directly impacts the insurability of the property as it assesses the risk associated with insuring the property. The age of the property can affect the likelihood of needing repairs or maintenance, the condition of the property can impact its insurability if there are existing issues that could lead to insurance claims, and the location is crucial as it determines the property's exposure to risks like natural disasters or crime rates. The other options are not as directly related to the insurability condition requested by the buyer. While factors like mortgage underwriting standards, the seller's insurance claims history, the buyer's credit score, prior inspection reports, and neighborhood demographics may play a role in the overall transaction, they are not the primary considerations when evaluating the impact of an insurability condition on a property.