NSAR SALESPERSON LICENSING COURSE QUESTIONS 2026 SUMMER-FALL EXAM
WITH ACCURATE SOLUTIONS
Subjective Value
the perception of value in the minds of the buyer and seller
Objective Value
related to the direct cost of creating (e.g. acquiring a lot and building a home)
Types of value found in the Canadian Economy
-insurable; book
-appraised
-salvage
-assessed
-liquidation
-loan
-sentimental
Three approaches that appraisers use to establish an estimate of value
-cost approach (actual cost)
-income approach (subjective value)
-direct comparison approach (subjective value)
,market price
the price for an individual property
market value (aka value in exchange)
an estimate of value arising from many sales (market prices)
Definition of Market Value
The most probable price, as of a specified date, in cash, or in terms equivalent to cash or in
other precisely revealed terms, for which the specified property rights should sell after
reasonable exposure in a competitive market under all conditions requisite to a fair-sale,
with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and
assuming that neither is under undue duress.
The 4 assumptions of market value
1) reasonable time
2) no undue pressure
3) prudent behaviour
4) informed buyer and seller
15 Principles of Value
- Principle of Anticipation
- Principle of Balance
,- Principle of Change
- Principle of Competition
- Principle of Conformity
- Principle of Consistent Use
- Principle of Contribution
- Principle of External Factors
- Principle of Highest & Best Use
- Principle of Increasing/Decreasing Returns
- Principle of Progression
- Principle of Regression
- Principle of Substitution
- Principle of Supply & Demand
- Principle of Surplus
- Productivity
Principle of Anticipation
Buyers buy the present worth of future benefits (e.g. thinking about resale value)
Principle of Balance
Maximum value is maintained through balance (e.g. huge house with only one car garage is
not balanced)
Principle of Change
, A value today is valid only for today (e.g. large portion of the community will be losing their
jobs = lower value of house as lower demand)
Principle of Competition
Excess profit breeds ruinous competition (two people see same opportunity and both jump
in; neither will achieve their anticipated profits)
Principle of Conformity
Reasonable conformance with existing standards protects value (houses that conform with
one another hold their value)
Principle of Consistent Use
No double dipping when analyzing value (can't give value to the house on a commercial
property worth building on; must be viewed together as you'd have to renovate the house to
use it commercially)
Principle of Contribution
Value relates to contribution; not cost (owner wants to put in a pool that cost $10,000 but
appraiser says it will only improve value of house by $7,000)
Principle of External Factors
Things nearby can influence value (two comparable houses purchased on a quiet vs. noisy
street = noisy street will have decreased value)
WITH ACCURATE SOLUTIONS
Subjective Value
the perception of value in the minds of the buyer and seller
Objective Value
related to the direct cost of creating (e.g. acquiring a lot and building a home)
Types of value found in the Canadian Economy
-insurable; book
-appraised
-salvage
-assessed
-liquidation
-loan
-sentimental
Three approaches that appraisers use to establish an estimate of value
-cost approach (actual cost)
-income approach (subjective value)
-direct comparison approach (subjective value)
,market price
the price for an individual property
market value (aka value in exchange)
an estimate of value arising from many sales (market prices)
Definition of Market Value
The most probable price, as of a specified date, in cash, or in terms equivalent to cash or in
other precisely revealed terms, for which the specified property rights should sell after
reasonable exposure in a competitive market under all conditions requisite to a fair-sale,
with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and
assuming that neither is under undue duress.
The 4 assumptions of market value
1) reasonable time
2) no undue pressure
3) prudent behaviour
4) informed buyer and seller
15 Principles of Value
- Principle of Anticipation
- Principle of Balance
,- Principle of Change
- Principle of Competition
- Principle of Conformity
- Principle of Consistent Use
- Principle of Contribution
- Principle of External Factors
- Principle of Highest & Best Use
- Principle of Increasing/Decreasing Returns
- Principle of Progression
- Principle of Regression
- Principle of Substitution
- Principle of Supply & Demand
- Principle of Surplus
- Productivity
Principle of Anticipation
Buyers buy the present worth of future benefits (e.g. thinking about resale value)
Principle of Balance
Maximum value is maintained through balance (e.g. huge house with only one car garage is
not balanced)
Principle of Change
, A value today is valid only for today (e.g. large portion of the community will be losing their
jobs = lower value of house as lower demand)
Principle of Competition
Excess profit breeds ruinous competition (two people see same opportunity and both jump
in; neither will achieve their anticipated profits)
Principle of Conformity
Reasonable conformance with existing standards protects value (houses that conform with
one another hold their value)
Principle of Consistent Use
No double dipping when analyzing value (can't give value to the house on a commercial
property worth building on; must be viewed together as you'd have to renovate the house to
use it commercially)
Principle of Contribution
Value relates to contribution; not cost (owner wants to put in a pool that cost $10,000 but
appraiser says it will only improve value of house by $7,000)
Principle of External Factors
Things nearby can influence value (two comparable houses purchased on a quiet vs. noisy
street = noisy street will have decreased value)
