Humber/Ontario Real Estate Course 4 Exam Practice

Which principle of value justifies buying the smallest house on the street?

1. Conformity

2. Progression

3. Regression

4. External Factors

5. Anticipation

6. Competition

The correct answer is: Progression

The principle of value that justifies buying the smallest house on the street is associated with the concept of progression. This principle posits that properties of lesser value tend to increase in value when they are located in a neighborhood of more valuable properties. By purchasing the smallest house on a street where the other homes are larger or more expensive, a buyer can expect that the value of their property will be positively affected by the overall higher values of surrounding properties. This is crucial for buyers who are looking to maximize their investment. When the general trend of the neighborhood is upward in value, even the smallest or least expensive home can benefit from the demand and appeal of the nearby higher-end properties. Thus, buying the smallest house in a desirable area aligns with the principle of progression, as it presents an opportunity for potential appreciation in value as the neighborhood continues to develop or remains in demand.