Property ValuationIntermediateAlabama Exam

The principle of conformity states that maximum value is achieved when:

AA property is the most unique in the neighborhood

BProperties in an area are similar in size, style, and useCorrect

CA property's value conforms to its assessed value, in general

DMarket prices are rising consistently

Why Properties in an area are similar in size, style, and use Is Correct

Answer B: Properties in an area are similar in size, style, and use

The principle of conformity holds that properties maintain maximum value when they are similar in size, style, use, and quality to other properties in the immediate area.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.