Value (....) Flashcards
What is the principle of substitution?
The maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property
This principle is crucial in determining property value in real estate.
The principle of substitution sets an ____ _____ of value
upper limit
What is highest and best use?
The most profitable single use of a property
The use must be legally permissible, physically possible, and financially feasible.
What are the conditions for highest and best use?
The use must be:
* legally permissible
* physically possible
* financially feasible
What are increasing and decreasing returns?
The relationship between cost of an improvement and its contribution to value
What is overimprovement?
You improve your property too much
This occurs when the amount spent on improvement is not proportionally reflected in the returns.
What is conformity?
When a property is in harmony with its surroundings, there is a greater contributory value
Buildings should be similar in design, construction, size, and age.
What is assemblage?
Combining two or more adjoining properties into one tract
What is plottage?
The added value as a result of assemblage
Assemblage is when you combine two or more adjoining properties into one tract.
What is progression?
The value of an inferior property enhanced by association with superior properties of the same type
What is regression?
The value of a superior property is adversely affected by association with an inferior property of the same type
