SAEE SAEE - Core Valuation Principles Questions and Answers 3

Question 1

Which valuation principle states that the value of a property is influenced by the expectation of future benefits?

Accepted Answer

Principle of Anticipation

Answer

The principle of anticipation holds that value is created by the expectation of future benefits such as income or amenities.

Question 2

An appraiser finds that adding a fourth bedroom to a three-bedroom home increases its value by only $5,000, while each of the first three bedrooms added far more. This illustrates the principle of:

Accepted Answer

Diminishing Marginal Returns

Answer

Diminishing marginal returns means each additional unit of improvement contributes less to overall value than the previous unit.

Question 3

The principle of conformity suggests that maximum value is achieved when:

Accepted Answer

Land uses and property types are compatible within the neighborhood

Answer

Conformity states that properties achieve maximum value when they are reasonably similar to and compatible with surrounding properties.

Question 4

Under the principle of contribution, the value of a swimming pool in a property is best measured by:

Accepted Answer

The amount it adds to the market value of the property

Answer

Contribution measures value by the amount a component adds to total property value, not by its cost to install.

Question 5

A vacant lot sits between two fully developed commercial parcels. The lot's value increases significantly due to its potential for assembly with the adjacent parcels. This is an example of:

Accepted Answer

Plottage value

Answer

Plottage refers to the increment of value created by combining two or more parcels into a single, larger, more valuable site.

SAEE Test Practice Test

SAEE Test Practice Test

SAEE SAEE - Core Valuation Principles Questions and Answers 3