Property Valuation
In Mississippi, the 'market approach' to appraisal is based on the economic principle of:
AAnticipation
BSubstitution✓ Correct
CIncreasing and decreasing returns
DBalance
Explanation
The sales comparison approach is based on the principle of substitution—a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute. This principle establishes the relevance of comparable sales.
Related Mississippi Property Valuation Questions
- A Mississippi property has a gross monthly rent of $1,500. If the gross rent multiplier (GRM) for the area is 120, the estimated value is:
- A Mississippi appraiser is appraising a property for a buyer's lender. The appraiser's primary client is:
- An appraiser notes that a property's garage was built without permits and is non-conforming. This would most likely represent:
- In the sales comparison approach, an appraiser found a comparable that recently sold for $285,000 but lacks a swimming pool that the subject property has, valued at $12,000. What is the adjusted sale price of the comparable?
- The sales comparison approach to appraisal is MOST applicable for:
- An appraiser uses the income approach to value a commercial building in Biloxi, Mississippi. The appraiser divides the net operating income (NOI) by the capitalization rate to determine:
- An appraiser in Biloxi, Mississippi notes that a subject property is adjacent to the Gulf Coast casino corridor. The presence of casinos in the area would most likely be reflected as:
- The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. This principle underpins the:
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