Property Valuation
The principle of 'contribution' in real estate appraisal states that:
AEach improvement adds its full cost to the property's value
BThe value of any component is measured by how much it contributes to the value of the whole✓ Correct
CEach added bedroom contributes equally to value
DProperty value is the sum of all individual improvements
Explanation
The principle of contribution holds that the value of any improvement (or its absence) is measured by the amount it adds to (or subtracts from) the total value of the property, not by its cost.
Related Delaware Property Valuation Questions
- What is 'prospective value' in a Delaware appraisal?
- An appraisal is an opinion of value that must be prepared by:
- Capitalization rate (cap rate) is calculated as:
- The sales comparison approach to value is most appropriate for:
- Which approach to value is most appropriate for a Delaware single-family residence in a neighborhood of recent sales?
- In the income approach, before applying the cap rate, the appraiser must estimate:
- In an income property analysis, 'potential gross income' (PGI) is:
- What is a 'retroactive appraisal' or 'retrospective appraisal' in Delaware?
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