Externalities affecting a property may be:

Correct Answer

B) Positive or negative, and both affect value

Why this is correct: Externalities are influences originating outside a property's boundaries that affect its value. They can be positive (e.g., a new park, good school) or negative (e.g., a new landfill, noise). As the explanation notes, both types are identified from market evidence and impact value. Why the other choices are wrong: Externalities are not only negative; they can be positive. They are not limited to conditions on the subject site; by definition, they are off-site influences. They are relevant for all property types, not just commercial. Exam tip: For any property, ask: What outside factors help or hurt value? Both matter.