Humber/Ontario Real Estate Course 4 Exam Practice

What foundational principle might explain a buyer's preference for the smallest house on a street?

1. Continuous improvement

2. Appreciation through conformity

3. Progression

4. Anticipation of future value

5. Optimization of investment

6. Enhancement principle

The correct answer is: Progression

The preference for the smallest house on a street can be attributed to the concept of progression. This principle suggests that properties tend to increase in value as they are located among higher-valued homes. When a buyer chooses the smallest house in a neighborhood with larger, more expensive homes, they are taking advantage of the upward pressure on property values that results from the surrounding higher-end properties. In this context, the smaller house may not only be more affordable initially but is also positioned to appreciate in value more significantly than it might if it were located in a less desirable area. Buyers often recognize that as the neighboring homes maintain or increase in value, the smaller house will benefit from the overall quality and desirability of the neighborhood. This principle encourages buyers to think strategically about their investments and future potential, aligning perfectly with the notion of progression in real estate valuation.