Humber/Ontario Real Estate Course 2 Exam Practice

What principle of value is being applied when comparing the smallest house on a street to its larger neighbors?

1. Conformity

2. Progression

3. Regression

4. Supply and Demand

5. External Factors

6. Highest and Best Use

The correct answer is: Progression

The correct answer is Progression. Progression is the principle of value that suggests that the value of a smaller or less desirable property is positively influenced by the presence of larger or more desirable properties in the same area. When the smallest house on a street is compared to its larger neighbors, the value of the smallest house may be positively influenced by the higher value of the larger neighboring properties, based on the principle of Progression. In contrast: - Conformity refers to the value that is created by properties being similar or conforming to the neighborhood standard. - Regression refers to the decrease in value of a property when surrounded by properties of lesser value. - Supply and Demand relates to the balance between the availability of properties for sale and the desire of potential buyers to purchase them. - External Factors include influences on value such as economic conditions, government regulations, and environmental factors. - Highest and Best Use is the use that will give the property the highest value.