Property Valuation
What is the 'principle of anticipation' in real estate appraisal?
AThe appraiser's anticipation of future market changes requiring adjustment
BThe principle that value is created by the expectation of future benefits — buyers pay for what a property will do for them in the future (shelter, income, appreciation), not just its current state✓ Correct
CThe principle requiring appraisers to anticipate all comparable sales
DA Nevada rule requiring appraisers to project value five years forward
Explanation
The principle of anticipation holds that value today reflects the present worth of expected future benefits. For investment properties, this means cap rate analysis and discounted cash flows. For residential properties, buyers consider expected appreciation, school quality, and neighborhood trajectory. In Nevada, anticipation of the Las Vegas market's growth has historically justified premium prices in growth corridors like Summerlin and Henderson.
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