California Real Estate Brokerage Appraisal Practice Exam 2025 – The Comprehensive Guide to Master Your Licensing Exam!

In the principle of supply and demand, the demand of financially qualified buyers is crucial because it directly impacts how much buyers are willing to pay for a property. When there is a high number of financially qualified buyers in a market, competition among them can drive up property values.

Conversely, if there are few buyers who are financially capable of purchasing properties, the demand decreases, which can lead to lower property values. The financial qualifications of buyers highlight their ability not only to purchase but also to compete in the market effectively, thus influencing the overall demand and, in turn, the market value of real estate.

Location, size, and age of the property also play significant roles in value, but they do so within the context of buyer demand. A desirable location can enhance demand, while a property’s size and age may contribute to how qualified buyers perceive value, but without a pool of buyers who are both willing and able to purchase, these characteristics lose their significance in influencing market value.