Florida Real Estate Broker ExaminationValuation and Market AnalysisMedium
An appraiser is valuing a property that is part of a larger, master-planned community. The value of this property is significantly enhanced due to its proximity to green spaces, walking trails, and community amenities, which are maintained by a homeowner's association. Which appraisal principle best explains this increase in value?
- APrinciple of Assemblage
- BPrinciple of Conformity
- CPrinciple of Regression
- DPrinciple of Contribution
Show answer & explanationAnswer & explanation
Correct answer: B. Principle of Conformity
The Principle of Conformity states that maximum value is realized when a property is in harmony with its surroundings. In this case, the property conforms to and benefits from the well-planned and maintained community, enhancing its value.
Why the other options are wrong
- A. Assemblage is the combining of two or more parcels into one larger parcel, increasing its value.
- C. Regression refers to a property's value being negatively affected by inferior properties in the area.
- D. Contribution relates to the value added by individual property components, not external community features.
Principle of Conformity
Maximum value is realized when a property is in harmony with its surroundings, including architectural style, size, and amenities.
- Relates to how a property fits within its neighborhood.
- Value is enhanced when properties are similar and consistent.
- Contributes to neighborhood stability and desirability.
Memory trick: Appraisal principles are the rules of thumb for property value.