Property Valuation
In Alaska, the value added by a swimming pool to a residential property may be less than its construction cost because of the principle of:
ASubstitution
BContribution✓ Correct
CConformity
DPlottage
Explanation
The principle of contribution states that an improvement's value is measured by how much it adds to the total property value — not its cost to build. In Alaska's cold climate, a swimming pool may add significantly less than its construction cost because buyers in most Alaska markets don't value pools highly.
Related Alaska Property Valuation Questions
- In Alaska, the 'market data approach' (sales comparison approach) works best when:
- Gross Rent Multiplier (GRM) is calculated as:
- An appraiser using the sales comparison approach in Alaska adjusts comparable sales for differences. If a comparable is inferior to the subject property in a particular feature, the appraiser will:
- The principle of plottage (assemblage) in real estate valuation means that:
- A comparable sale used in the sales comparison approach requires a positive adjustment when:
- Under the income approach, effective gross income (EGI) is calculated as:
- In Alaska, the cost approach to value is MOST useful when appraising:
- An Alaska property's reproduction cost is:
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