Property Valuation
The principle of progression states that a lower-value property benefits from proximity to higher-value properties by:
ALosing value due to the comparison
BExperiencing an increase in its value by association✓ Correct
CRemaining unaffected by the surrounding properties
DDecreasing in effective age
Explanation
Progression is the opposite of regression. It holds that a lower-quality property benefits in value from being located among higher-quality properties.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
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