Property Valuation
The 'principle of contribution' in Wisconsin appraisal means:
AAll improvements add their full cost to value
BThe value of an improvement is measured by how much it adds to total property value, not its cost✓ Correct
CLandscaping always adds more value than it costs
DSellers must contribute to the buyer's closing costs
Explanation
The principle of contribution holds that the value of any component of a property is measured by the amount it contributes to the property's total value, not its actual cost to install.
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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.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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