Question

if a homeowner hears a rumor that an abandoned home next to his is about to be taken by the city and converted to a park, the appraiser would value the homeowner's property on the basis of a) conformity. b) plottage. c) anticipation. d) competition.

Answer 1

(c) If a homeowner hears a rumor that an abandoned home next to his is about to be taken by the city and converted to a park, the appraiser would value the homeowner's property on the basis of Anticipation.

The Principle of Anticipation holds that the market worth of a piece of property is equal to the current value of all expected future benefits.

A relatively straightforward illustration is when a buyer agrees to pay a particular price for a rental property based on estimates of the potential rental income for the property over a specific time frame. The Income Approach is the name of this property evaluation method that uses the anticipation concept.

Another straightforward example would be a vintner placing an offer on undeveloped land because he notices that the climate and water supplies are ideal for growing a vineyard there. than the one they would get from merely purchasing and retaining undeveloped land.

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