The principle of contribution in real estate appraisal states that:
Why The value of a component is measured by its contribution to the overall value of the property Is Correct
Answer B: The value of a component is measured by its contribution to the overall value of the property
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
People Also Study
Related North Carolina Questions
- The 'principle of contribution' in NC appraisal holds that:Property Valuation
- The principle of conformity in real estate value states that:Property Valuation
- An appraiser estimates a home's replacement cost new at $350,000, total depreciation of 25%, and land value of $80,000. What is the cost approach value?Property Valuation
- The principle of 'substitution' in real estate appraisal states that:Property Valuation
Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →