Property Valuation
Which principle explains why a 3-bedroom, 2-bath home in a West Virginia neighborhood of mostly 2-bedroom, 1-bath homes may not achieve full value for its extra features?
APrinciple of substitution
BPrinciple of regression✓ Correct
CPrinciple of anticipation
DPrinciple of contribution
Explanation
The principle of regression states that a higher-value property surrounded by lower-value properties will be pulled down in value by the inferior properties. The over-improved home may not achieve full market value for its extra bedrooms in a less improved neighborhood.
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