Real Estate Council of Alberta Fundamentals Practice Exam

What type of value reflects emotional worth in the mind of buyers or sellers?

1. Objective value

2. Subjective value

3. Investment value

4. Market value

The correct answer is: Subjective value

Subjective value is the correct answer because it refers to the worth that an item holds in the minds of individuals, based on personal feelings, tastes, or emotional attachments. This type of value can vary significantly from person to person, depending on their unique perceptions and experiences. For example, a home may have a different value to its owner who has fond memories associated with it compared to a potential buyer who views it strictly as an investment or asset. In contrast, objective value is based on measurable attributes and characteristics that can be uniformly assessed, such as the physical condition of a property or the square footage of a home. Investment value typically refers to the worth of a property based on its potential to generate income or grow in value over time, often evaluated through financial metrics. Market value is the price a property would likely sell for in a competitive and open market, often influenced by external economic conditions and buyer demand, rather than individual emotional factors. Thus, subjective value is rooted in personal preferences and feelings, making it the most appropriate choice for representing emotional worth.