Property Valuation
The 'principle of contribution' in appraisal states that the value of a component is measured by:
AIts cost to install
BThe amount it adds to the total value of the property, not its individual cost✓ Correct
CIts replacement cost new
DIts cost minus depreciation
Explanation
The principle of contribution holds that the value of any component is what it contributes to the overall property value. A $50,000 addition may only increase market value by $35,000 if that is what buyers are willing to pay more for it.
Related New Jersey Property Valuation Questions
- The principle of contribution states that the value of a component part of a property is:
- In the sales comparison approach, adjustments are made to the comparable sales to:
- An appraiser in NJ must sign and certify that the appraisal was prepared in conformance with:
- In NJ, the 'land residual technique' in the income approach to value is used primarily to:
- In New Jersey, when appraising an income property, a 'vacancy and collection loss' deduction is applied because:
- An appraiser for a NJ residential property must reconcile the results of the three approaches. For a modest single-family home in a suburban NJ neighborhood, which approach typically receives the MOST weight?
- In NJ, the 'bracketing' technique in the sales comparison approach means:
- A NJ appraiser's estimate of value is expressed as of a specific 'effective date' because:
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