A property's value is significantly reduced because neighbors and potential buyers associate it with a notorious criminal event. The physical structure is in perfect condition. This value reduction is an example of
Correct Answer
A) economic obsolescence caused by stigma
When a property's value decreases due to external perceptions and reputation rather than physical condition, this represents economic obsolescence caused by stigma.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Lead-Based Paint Disclosure is a federally mandated disclosure required for all residential properties built before 1978. Sellers and landlords must disclose known lead-based paint hazards and provide the EPA pamphlet "Protect Your Family From Lead in Your Home."
A material defect is a condition that significantly affects the value, desirability, or safety of a property and that would likely influence a reasonable buyer's decision to purchase or the price they would pay.
Megan's Law requires states to make information about registered sex offenders available to the public. Some states require real estate agents to inform buyers about the availability of sex offender registries.
More Property Disclosures Questions
A seller who fails to provide required disclosures may be liable for:
HOA disclosure requirements typically include:
Potential buyers lose interest in a house because local media repeatedly called it haunted even though inspections reveal no physical problem. What issue is this?
A seller knows that a prior occupant died peacefully in the home several years ago, and there is no physical defect. Which special disclosure issue is presented?
The doctrine of 'caveat emptor' (buyer beware) has been largely replaced by:
- → In a state that requires a written disclosure of a home's condition to the buyer, the disclosure form is filled out by:
- → Under TRID, the Loan Estimate replaced which older disclosure form that was previously provided to borrowers early in the loan process?
- → The Closing Disclosure must be received by the borrower at least three business days before closing. If closing is scheduled for Friday and no federal holiday falls during that week, when is the latest the borrower can receive the Closing Disclosure?
- → The Closing Disclosure replaced which two older disclosure forms that were previously used in residential mortgage transactions?
- → Under TRID, all of the following are included on Page 1 of the Loan Estimate EXCEPT.
- → A borrower compares the Loan Estimate with the Closing Disclosure and sees that government recording fees rose from $350 to $400. Under the TRID tolerance rules, is that increase permitted?
- → A borrower receives a Loan Estimate and notices that the estimated title insurance fee is $1,200. At closing, the Closing Disclosure shows the title insurance fee is $1,400. The borrower was allowed to shop for title insurance from a list provided by the lender. Under TRID tolerance rules, is this increase permissible?
- → A lender's origination charge on the Loan Estimate is $2,000. At closing, the origination charge on the Closing Disclosure is $2,300. Under TRID, what must the lender do?
- → A borrower submits a mortgage loan application on Monday. Under TRID, by when must the lender provide the Loan Estimate?
- → The Closing Disclosure includes a section showing how much total interest the borrower will pay over the life of the loan. A borrower sees that for a $300,000 30-year fixed-rate loan at 6.5 percent, the total interest exceeds $382,000. What purpose does this disclosure serve?
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A listing agent is asked by a prospective buyer whether the home is near any known environmental hazards or has any 'bad energy.' The agent knows of no physical issues but has heard neighborhood rumors about supernatural activity. The agent's safest course of action is to
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