Real Estate Appraisal Practice Exam

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Prepare for the Real Estate Appraisal Exam with tailored questions and explanations. Boost your knowledge and confidence to succeed in your appraisal exam!

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Diane notes scarcity in the market for her latest listing. What does this value-influencing DUST factor represent?

High competition for available properties.
Low availability of properties.
High demand from potential buyers.
Increased pricing due to inflation.

The correct answer is: Low availability of properties.

Scarcity in the real estate market directly correlates with the availability of properties. When Diane notes scarcity, she is observing that there are fewer properties available for sale relative to demand. This diminished supply often leads to heightened competition among buyers, which can subsequently drive up prices. Therefore, recognizing low availability of properties is essential to understand how it influences market value. In this scenario, scarcity effectively serves as a clear indicator that the supply of homes is limited, which is a key component in determining property value as per the DUST (Demand, Utility, Scarcity, Transferability) factors in real estate appraisal.