Principles of Real Estate 2 Exam Questions & Answers 100% Accurate

appraisal - ANSWER--an appraiser's opinion of value -lenders use this to determine market value of property being used to secure the loan highest and best use - ANSWER-legal use for property that gives greatest return in money and/or amenities principle of contribution - ANSWER-property's value is equal to the sum of the contributory value of each of its component parts T/F: in a practical application of the concept of contribution, cost does NOT equal value. - ANSWER-true principle of change - ANSWER-forces of change can be specific or external to property, always affecting value of the land principle of anticipation - ANSWER-purchase price is affected by expectation of future appeal and benefits principle of subsititution - ANSWER-a commodity's value is influenced by hte cost of acquiring a substitute or ocmprable item principle of conformity - ANSWER-value is maximized when there is a reasonable degree of homogeneity, or sameness, in a neighborhood principle of increasing and decreasing returns - ANSWER-it is prudent to improve property when the value added by the improvement exceeds cost of the improvement