Property Valuation
The principle of contribution in real estate valuation states that:
AAll improvements add their full cost to property value
BThe value of a component is measured by how much it contributes to the total property value✓ Correct
CA seller must contribute to buyer closing costs
DCommercial tenants contribute to increased property values
Explanation
The principle of contribution measures a component's value by how much it adds to the total property value — not by what it cost. A $50,000 pool addition may only contribute $30,000 to the home's market value.
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