Real Estate Appraisal Practice Exam 2026 – Complete Prep Resource

The concept of value in real estate appraisal is defined by several key characteristics that determine how valuable a property can be perceived. These characteristics include scarcity, utility, and transferability, all of which directly influence the demand and pricing of real estate properties.

Scarcity refers to the limited availability of a resource, which increases its value. When a property or resource is scarce, it is generally more desirable. Utility denotes the usefulness of a property to potential buyers, encompassing how well the property meets the needs and desires of its users. Finally, transferability describes the ease with which property rights can be transferred from one party to another, influencing marketability and ultimately property values.

Time, on the other hand, while it can affect the perception of value in terms of market trends and timing of transactions, is not one of the fundamental characteristics of value itself. Time relates more to the duration a property sits on the market or market conditions at a given moment rather than an inherent characteristic that defines the value of the property. Thus, addressing the aspects that form the core of what establishes value, time is recognized as extrinsic rather than a characteristic that constitutes the value of real estate.