Property Valuation
Regression in Vermont real estate appraisal means that:
AAn over-improved property may be pulled down in value by lesser surrounding properties✓ Correct
BAn under-improved property increases in value from its surroundings
CValues always decrease over time
DProperties near ski resorts always depreciate
Explanation
The principle of regression holds that a higher-value property will tend to lose value when surrounded by lower-value properties — the higher-quality property is 'pulled down' by the lesser surroundings.
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Key Terms to Know
Appraisal
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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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