New Jersey Real Estate Practice Exam Practice Question
What does the mortgage lender most often rely on when deciding how much is safe to lend on a parcel of real estate?
Correct Answer: C
Rationale: Mortgage lenders primarily rely on the appraisal report to determine the value of a property, as it provides an objective assessment of its market worth based on factors like location, condition, and comparable sales.
Option A, market analysis, while useful, is less formal and often subjective, lacking the rigor of an appraisal. Option B, the sales contract, reflects the buyer's offer but may not accurately represent the property's fair market value. Option D, assessor's determination, typically pertains to property taxes and may not reflect current market conditions, making it less reliable for lending decisions.
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