The principle of ……. as used in appraising is that the greatest value in property will occur when the type and size of improvements and uses are proportional to each other as well as to the land.
Question
The principle of ……. as used in appraising is that the greatest value in property will occur when the type and size of improvements and uses are proportional to each other as well as to the land.
Solution
The principle referred to in the text is the "Principle of Balance". This principle in real estate appraisal suggests that the greatest value in a property is achieved when the improvements and uses of the property are in balance with each other and with the land itself. This means that the type and size of the buildings and other improvements should be proportional to the value and potential use of the land. For example, a large industrial building on a small piece of land in a residential area would be out of balance and likely have a lower value. Conversely, a small house on a large piece of valuable commercial land would also be out of balance. The principle of balance helps appraisers determine the highest and best use of a property and estimate its value.
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