Property Valuation
A Wyoming appraiser considers the 'principle of conformity' when valuing a residential property. This principle states:
AProperties must conform to BLM land use regulations
BMaximum value is achieved when a property conforms to the character and use of the surrounding neighborhood✓ Correct
CAll properties in a neighborhood must have the same square footage
DCommercial and residential uses must conform to zoning without exception
Explanation
The principle of conformity states that a property achieves maximum value when it conforms to the standard character and use of its surrounding neighborhood. An excessively large house in a modest neighborhood (over-improvement) or a small house in a luxury area (under-improvement) will not achieve full value.
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Key Terms to Know
Zoning
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
AppraisalA 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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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