California Real Estate Practice Exam

Which of the following represent the four unities of market value?

1. Demand, utility, scarcity, transferability

2. Location, demand, financing, interest

3. Possession, encumber, will, sell

4. Time, title, interest, possession

The correct answer is: Demand, utility, scarcity, transferability

The four unities of market value are essential concepts in real estate that help define the conditions under which a property can be bought and sold successfully. The correct answer identifies "demand, utility, scarcity, transferability" as those unities. Demand refers to the desire of potential buyers to acquire a property, indicating that a market will only exist if people want to buy the property. Utility indicates the usefulness or functionality of the property to fulfill the needs of a buyer. Scarcity pertains to the limited supply of properties in relation to demand, impacting both value and desirability. Transferability involves the ability to convey the property’s title from one owner to another, signifying that a property is marketable and can change hands within the legal frameworks in place. The other options do not capture all four essential components of market value effectively. While some terms might relate to real estate transactions or factors influencing value, they do not represent the fundamental unities that directly define market value in the way that the first option does. Understanding these four unities is crucial for real estate professionals to assess and determine property values accurately in the market.