Property Valuation
An overimprovement to a property is one where:
AThe improvement adds more value than it costs
BThe cost of the improvement exceeds its contribution to market value✓ Correct
CThe improvement violates building codes
DThe property's improvements exceed the lot size requirements
Explanation
An overimprovement occurs when the cost of an improvement exceeds the value it contributes to the property. It represents superadequacy (a form of functional obsolescence) and results in incurable depreciation.
Related Arkansas Property Valuation Questions
- An underimprovement to a property occurs when:
- The 'effective date' of an appraisal refers to:
- In an appraisal, an adjustment for a comparable sale that is SUPERIOR to the subject property results in:
- The principle of contribution states that the value of an improvement is measured by:
- The principle of substitution states that a buyer will not pay more for a property than:
- Market value is best defined as:
- A comparable property sold for $250,000 but has a garage worth $10,000 that the subject property lacks. The adjusted value of the comparable for comparison to the subject is:
- When using the income approach, potential gross income minus vacancy and credit losses equals:
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