Property Valuation
In Florida real estate, the 'principle of conformity' holds that:
AAll properties in a neighborhood must conform to the same zoning classification
BMaximum value is achieved when a property is similar in use, size, and style to neighboring properties✓ Correct
CAppraisers must use a standardized report format
DProperties must conform to the assessed value set by the county appraiser
Explanation
The principle of conformity states that a property achieves maximum value when it conforms to surrounding properties in use, size, style, and type. A mansion surrounded by modest homes suffers from regression (over-improvement), while a modest home surrounded by mansions benefits from progression (under-improvement).
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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