Property Valuation
The principle of 'contribution' in real estate appraisal means:
AAll improvements add their full cost to property value
BThe value of a component is measured by its contribution to the whole property's value, not its cost✓ Correct
CLand always contributes more value than improvements
DRenovations must be approved by the appraisal district to add value
Explanation
The principle of contribution states that the value of any component (e.g., an added bedroom, pool, or garage) is measured by how much it adds to the total property value, not by its cost to install. A $50,000 pool may only add $20,000 in market value if buyers do not pay proportionally for it.
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