Property Valuation
Regression and progression are appraisal principles related to:
AThe rate of depreciation applied to a building
BHow the value of a property is affected by the values of surrounding properties✓ Correct
CThe time adjustments made to comparable sales
DThe impact of interest rates on property values
Explanation
Regression: a higher-value property surrounded by lower-value properties tends to decrease in value due to its inferior surroundings. Progression: a lower-value property surrounded by higher-value properties tends to increase in value. These principles are important in Minnesota neighborhoods undergoing change.
Related Minnesota Property Valuation Questions
- In Minnesota, the Uniform Standards of Professional Appraisal Practice (USPAP) requires appraisers to:
- A Minnesota buyer is purchasing a small strip mall and wants a cap rate analysis. The property has gross income of $120,000, vacancy allowance of $12,000, and operating expenses of $42,000. With a purchase price of $880,000, what is the cap rate?
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- A Minnesota appraiser is valuing a property that has been impacted by a nuisance (loud neighboring business). How is this reflected in the appraisal?
- Which of the following would be the BEST comparable for a 3-bedroom, 2-bath, 1,500 sq ft ranch home in Burnsville, Minnesota?
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