Property Valuation
Which principle states that when two properties are similar, the value of the more expensive property is affected negatively by its proximity to the less expensive property?
AProgression
BRegression✓ Correct
CContribution
DSubstitution
Explanation
The principle of regression states that a higher-value property surrounded by lower-value properties will decrease in value due to the surrounding properties. Conversely, progression states that a lower-value property benefits from higher-value neighbors.
People Also Study
Related Florida Questions
- The 'principle of conformity' in Florida real estate states that value is maximized when:Property Valuation
- A Florida commercial property has an NOI of $85,000. Similar properties in the market are trading at a 7.5% cap rate. What is the estimated market value of the property?Real Estate Math
- In Florida, the principle of 'contribution' in real estate appraisal states that:Property Valuation
- Regression and progression are appraisal principles related to:Property Valuation
- The 'principle of substitution' in Florida real estate valuation states that:Property Valuation
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.
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Study This Topic
Practice More Florida Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Florida Quiz →