What is 'progression' as an appraisal principle?
Why A lower-value property gains value from proximity to surrounding higher-value properties Is Correct
Answer B: A lower-value property gains value from proximity to surrounding higher-value properties
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.
Key Property Valuation Terms in This Question
People Also Study
Related California Questions
- A property generates annual gross rent of $96,000. If comparable properties sell at a GRM of 12 (annual), what is the estimated property value?Real Estate Math
- A property generates an NOI of $60,000. Comparable properties sell at a 5% cap rate. What is the indicated value using the income approach?Property Valuation
- The principle of progression states that:Property Valuation
- The principle of anticipation states that value is:Property Valuation
- A commercial property has an annual NOI of $105,600 and comparable properties are selling at a 7% cap rate. What is the property's value using the income approach?Real Estate Math
- An income property has an NOI of $84,000. Comparable properties are selling at a 7% cap rate. What is the estimated value?Real Estate Math
- A 2,000 sq ft home in a neighborhood has a value of $400 per square foot based on comparable sales. Using the sales comparison approach, what is the indicated value?Property Valuation
- A property has an NOI of $45,000 and similar properties in the area have a cap rate of 7.5%. What is the estimated value?Real Estate Math
Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
1031 ExchangeA tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.
Math Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →