Property Valuation
Regression in real estate valuation refers to:
AA reduction in value when a property is surrounded by lower-value properties✓ Correct
BThe mathematical regression analysis used in mass appraisal
CWhen a property's value increases over time
DA legal action challenging an appraisal
Explanation
The principle of regression states that a higher-value property's value is pulled down by surrounding lower-value properties—the opposite of progression, where lower-value properties benefit from proximity to higher-value ones.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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