Massachusetts Real Estate Salesperson Exam — All Questions
← Back to practice2 questions
Two adjacent lots differ in value mainly because one is much larger. When adjusting comparables, this reflects the appraisal principle of:
- a.Anticipation
- b.Contribution✓
- c.Escheat
- d.Novation
The principle of contribution states that the value of a component (such as extra lot size or an added feature) is measured by how much it adds to the whole property's value, not by its cost. Appraisers use it when adjusting comparable sales.
An appraiser is asked for the value of a unique historic library building with no comparable sales and no rental income. The most appropriate approach is usually the:
- a.Income approach
- b.Gross rent multiplier
- c.Sales comparison approach
- d.Cost approach✓
For special-purpose properties with few or no comparable sales and no income stream, the cost approach (land value plus depreciated replacement cost) is generally the most reliable. The income and sales comparison approaches lack the data such a property provides.