The economic principle of 'conformity' in real estate holds that:
Why Property value is maximized when uses are compatible and properties are similar in style and quality Is Correct
Answer B: Property value is maximized when uses are compatible and properties are similar in style and quality
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 Colorado Questions
- Under Colorado property tax assessment, residential properties are assessed at what percentage of actual (market) value?Property Valuation
- A Colorado property manager who manages residential rental properties for multiple owners must maintain:Property Management
- A Colorado investment property generates an annual NOI of $45,000 and comparable properties are selling at a 6% cap rate. What is the indicated value?Property Valuation
- An appraiser in Colorado uses 3 comparable sales to value a property. The adjusted values are $385,000, $392,000, and $395,000. What is the most likely final value indication from reconciliation?Property Valuation
- Economic obsolescence (external obsolescence) in appraisal refers to loss in value caused by:Property Valuation
Key Terms to Know
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Study This Topic
Practice More Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →