Property Valuation
The principle of progression in real estate appraisal means:
AA lower-value property tends to increase in value when surrounded by higher-value properties✓ Correct
BProperty values always increase over time
CThe cost to replace a building always exceeds its market value
DDepreciation increases progressively as a property ages
Explanation
The principle of progression states that the value of a lower-quality or smaller property is enhanced by being located among higher-quality or higher-value properties — sometimes called the 'rising tide' effect.
Related Arizona Property Valuation Questions
- A property in Arizona has a gross rent multiplier (GRM) of 120 and rents for $1,800 per month. What is the estimated value using the GRM method?
- Which type of depreciation is caused by factors external to the property, such as a nearby industrial plant, and is generally considered incurable?
- A commercial property's 'potential gross income' (PGI) represents:
- In the sales comparison approach, an appraiser makes 'adjustments' to comparable sales. If a comparable sale has a pool and the subject property does NOT, the appraiser would:
- In Arizona, the 'sales comparison approach' to value requires the appraiser to make adjustments for differences between the subject and comparables. The rule is: if the comparable is INFERIOR, the adjustment is:
- The cost approach to value estimates property value by:
- An Arizona appraiser finds a comparable sale has one extra bathroom compared to the subject property. The appraiser would:
- When appraising income-producing property such as an Arizona apartment complex, an appraiser would primarily use the:
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