NSAR Salesperson Licensing Course Exam Questions
and Answers.
Subjective Value - Correct Answer the perception of value in the minds of the buyer and
seller
Objective Value - Correct Answer related to the direct cost of creating (e.g. acquiring a lot
and building a home)
Types of value found in the Canadian Economy - Correct Answer -insurable; book
-appraised
-salvage
-assessed
-liquidation
-loan
-sentimental
Three approaches that appraisers use to establish an estimate of value - Correct Answer -
cost approach (actual cost)
-income approach (subjective value)
-direct comparison approach (subjective value)
market price - Correct Answer the price for an individual property
market value (aka value in exchange) - Correct Answer an estimate of value arising from
many sales (market prices)
Definition of Market Value - Correct Answer 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.
What brokerage should you join after you pass this exam? Let's chat! - Correct Answer
Instagram: @laurahalifaxrealtor
Facebook: Laura Sumarah
Text: 902 210 9876
,The 4 assumptions of market value - Correct Answer 1) reasonable time
2) no undue pressure
3) prudent behaviour
4) informed buyer and seller
15 Principles of Value - Correct Answer - 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 - Correct Answer Buyers buy the present worth of future benefits
(e.g. thinking about resale value)
Principle of Balance - Correct Answer Maximum value is maintained through balance (e.g.
huge house with only one car garage is not balanced)
Principle of Change - Correct Answer 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 - Correct Answer Excess profit breeds ruinous competition (two
people see same opportunity and both jump in; neither will achieve their anticipated
profits)
Principle of Conformity - Correct Answer Reasonable conformance with existing
standards protects value (houses that conform with one another hold their value)
Principle of Consistent Use - Correct Answer 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 - Correct Answer 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 - Correct Answer Things nearby can influence value (two
comparable houses purchased on a quiet vs. noisy street = noisy street will have
decreased value)
Principle of Highest and Best Use - Correct Answer Focus on the use that will produce the
greatest return (look at the property's current and potential use = large house on lot that a
four-plex could be built; value can increase based on this possibility)
Principle of Increasing/Decreasing Returns - Correct Answer More is not necessarily
better (building one garage may increase value, but building two more wont increase 3x; it
reaches a point)
Principle of Progression - Correct Answer The smallest house on the street might be the
best buy (when houses aren't similar; the poorest property increases in value)
Principle of Regression - Correct Answer The largest house on the street might not be the
best buy (when houses aren't similar; the highest value home loses value due to it's
neighbours)
Principle of Substitution - Correct Answer Buyers look for the best bang for their buck
(they value a home by comparing it to a substitute and choose the best priced one)
and Answers.
Subjective Value - Correct Answer the perception of value in the minds of the buyer and
seller
Objective Value - Correct Answer related to the direct cost of creating (e.g. acquiring a lot
and building a home)
Types of value found in the Canadian Economy - Correct Answer -insurable; book
-appraised
-salvage
-assessed
-liquidation
-loan
-sentimental
Three approaches that appraisers use to establish an estimate of value - Correct Answer -
cost approach (actual cost)
-income approach (subjective value)
-direct comparison approach (subjective value)
market price - Correct Answer the price for an individual property
market value (aka value in exchange) - Correct Answer an estimate of value arising from
many sales (market prices)
Definition of Market Value - Correct Answer 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.
What brokerage should you join after you pass this exam? Let's chat! - Correct Answer
Instagram: @laurahalifaxrealtor
Facebook: Laura Sumarah
Text: 902 210 9876
,The 4 assumptions of market value - Correct Answer 1) reasonable time
2) no undue pressure
3) prudent behaviour
4) informed buyer and seller
15 Principles of Value - Correct Answer - 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 - Correct Answer Buyers buy the present worth of future benefits
(e.g. thinking about resale value)
Principle of Balance - Correct Answer Maximum value is maintained through balance (e.g.
huge house with only one car garage is not balanced)
Principle of Change - Correct Answer 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 - Correct Answer Excess profit breeds ruinous competition (two
people see same opportunity and both jump in; neither will achieve their anticipated
profits)
Principle of Conformity - Correct Answer Reasonable conformance with existing
standards protects value (houses that conform with one another hold their value)
Principle of Consistent Use - Correct Answer 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 - Correct Answer 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 - Correct Answer Things nearby can influence value (two
comparable houses purchased on a quiet vs. noisy street = noisy street will have
decreased value)
Principle of Highest and Best Use - Correct Answer Focus on the use that will produce the
greatest return (look at the property's current and potential use = large house on lot that a
four-plex could be built; value can increase based on this possibility)
Principle of Increasing/Decreasing Returns - Correct Answer More is not necessarily
better (building one garage may increase value, but building two more wont increase 3x; it
reaches a point)
Principle of Progression - Correct Answer The smallest house on the street might be the
best buy (when houses aren't similar; the poorest property increases in value)
Principle of Regression - Correct Answer The largest house on the street might not be the
best buy (when houses aren't similar; the highest value home loses value due to it's
neighbours)
Principle of Substitution - Correct Answer Buyers look for the best bang for their buck
(they value a home by comparing it to a substitute and choose the best priced one)
