Certified Relocation Professional (CRP) Practice Exam

What determines a home's value under a buyer value option program?

1. The average of two independent home appraisals

2. A broker price opinion

3. A purchase offer by a bona fide buyer

4. The home's replacement cost

The correct answer is: A purchase offer by a bona fide buyer

In a buyer value option program, the home's value is determined by a purchase offer made by a bona fide buyer. This approach reflects the market's perception of value as it considers what a real buyer is willing to pay for the property. It typically involves the dynamics of current supply and demand, and negotiations based on comparable sales, the uniqueness of the property, and specific buyer motivations. Empowering a purchase offer as the determiner of value allows for a more accurate reflection of the home's market value as it is not simply an arbitrary figure or influenced solely by appraisals or cost estimates, but rather is based on actual buyer interest and commitment. In scenarios like this, the willingness of a buyer to enter into a contract for the purchase of a home provides a concrete measure of its worth in the current economic climate. While the other options—independent home appraisals, broker price opinions, and replacement costs—certainly provide important information about the potential value of a home, they do not capture the real-time, market-driven aspect of value that a bona fide buyer's offer represents.