Property Valuation
The principle of anticipation in Minnesota real estate valuation states that:
AProperty value is determined only by past sales
BValue is the present worth of future benefits—including income, amenities, and appreciation✓ Correct
CBuyers should anticipate problems with all older properties
DMarket values always increase over time
Explanation
The principle of anticipation holds that value is the present worth of anticipated future benefits—including income streams, tax advantages, amenities, and resale proceeds. For example, a property near a planned light rail station in the Twin Cities may already reflect anticipated future accessibility in its current value.
Related Minnesota Property Valuation Questions
- A Minnesota appraiser determines that a property is worth $350,000 using the sales comparison approach and $360,000 using the cost approach. The appraiser reconciles the two values and concludes $355,000. This process is called:
- Assemblage in Minnesota real estate valuation refers to:
- Economic life of a building in Minnesota appraisal refers to:
- In Minnesota, an appraiser's 'narrative report' differs from a 'form report' in that:
- In Minnesota, the 'reconciliation' step in the appraisal process involves:
- In Minnesota, the income approach to valuation of residential property is most appropriate for:
- The principle of progression holds that:
- The capitalization rate (cap rate) is used in the income approach and is calculated as:
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