Property Valuation
The principle that value is influenced by the expectation of future benefits is known as:
ASubstitution
BAnticipation✓ Correct
CContribution
DConformity
Explanation
The principle of anticipation states that property value reflects the present worth of future benefits. Buyers pay based on expected future income or enjoyment.
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- The principle of anticipation in real estate valuation means that a property's value reflects:Property Valuation
- The principle of conformity states that value is maximized when:Property Valuation
- The principle of progression states that a lower-value property benefits from proximity to higher-value properties by:Property Valuation
- The income approach to value is most appropriate for:Property Valuation
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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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