Property Valuation
The principle of anticipation in real estate valuation holds that:
AValue is determined by the cost to reproduce the property
BValue is created by the expectation of future benefits the property will produce✓ Correct
CProperties decline in value as they age
DThe market price equals the appraised value
Explanation
The principle of anticipation states that present value is created by the expectation (anticipation) of future benefits. Buyers are essentially paying today for the benefits they expect to receive from ownership in the future.
Related Georgia Property Valuation Questions
- A 'before and after' approach in appraisal is commonly used when:
- The sales comparison approach to value is most appropriate for:
- A Georgia commercial property has potential gross income of $120,000, vacancy and credit loss of 8%, and operating expenses of $40,000. Using the income approach with a cap rate of 9%, what is the estimated value?
- An appraiser makes a final value conclusion by reconciling the three approaches. This process is called:
- The cost approach to value is most reliable for:
- External (economic) obsolescence differs from functional obsolescence in that it is:
- Effective age in appraisal refers to:
- The principle of substitution states that:
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