Which statement about the effect of a judgement on market value is most accurate?

Which statement about the effect of a judgement on market value is most accurate?

• A. The impact is fixed and independent of satisfaction.
• B. The impact depends on whether the judgement can be satisfied from sale proceeds or discharged.
• C. The judgement always halts any sale.
• D. The judgement guarantees a higher sale price.

Answer: (B)

Judgments affect market value through encumbrances that must be resolved to transfer title. The key point is how the debt is handled at closing. If the judgment can be satisfied from the sale proceeds, that amount is paid out of the price, reducing the net proceeds to the seller and typically lowering the market value as viewed by a buyer. If the judgment can be discharged before or at closing—through payment, release, or other arrangements—the sale can proceed with less impact on value. A lien that halts a sale or that would raise the price without reducing the debt isn’t accurate. So the most accurate statement is that the impact depends on whether the judgment can be satisfied from sale proceeds or discharged.

Judgments affect market value through encumbrances that must be resolved to transfer title. The key point is how the debt is handled at closing. If the judgment can be satisfied from the sale proceeds, that amount is paid out of the price, reducing the net proceeds to the seller and typically lowering the market value as viewed by a buyer. If the judgment can be discharged before or at closing—through payment, release, or other arrangements—the sale can proceed with less impact on value. A lien that halts a sale or that would raise the price without reducing the debt isn’t accurate. So the most accurate statement is that the impact depends on whether the judgment can be satisfied from sale proceeds or discharged.