PRINCIPLES OF VALUE.pdf

Solutions Course 101 Fundamentals of Real Property Appraisal EXERCISE 1-8 SOLUTION BASIC PRINCIPLES OF VALUE  Anticipation  The value for a component of property depends on contribution to the whole  Balance 2. A property must be valued with a single use for the entire property. 9 Change 3. The...

Solutions Course 101 Fundamentals of Real Property Appraisal EXERCISE 1-8 SOLUTION BASIC PRINCIPLES OF VALUE  Anticipation  The value for a component of property depends on contribution to the whole  Balance 2. A property must be valued with a single use for the entire property. 9 Change 3. The amount of goods that producers are willing to sell under various conditions during a given period  Competition 4. Net income remaining after the costs of labor, management, and capital have been paid  Conformity  3UHVHQWZRUWKRIIXWXUHEHQH¿WV 2 Consistent Use  Market value of a property tends to be set by the cost of acquiring an equally desirable and valuable property.  Contribution   Increasing/ Decreasing Returns Maximum value is obtained when the four agents of production attain a state of equilibrium. 8. Quantities of various goods that people are willing and able to buy during some period, given the choices available to them.  Progression/ 9. Regression The tendency of social and economic forces affecting supply and demand to shift over time.  6XEVWLWXWLRQ  Availability must be in harmony with demand. If one or the other is in excess, prices will increase or decrease. 4 6XUSOXV3UR-  The value of property depends, in part, on its relationship to its surroundductivity ings. 3 6XSSO\  After a certain point, the addition of successive increments of one agent of production decreases future incomes or amenities. 8 Demand  The value of a lower priced property is increased by its association with better properties of the same type. ‹,$$2 l 5HYLVHG 8SGDWHG-XO\ Solutions Chapter 1 - 13