Question

a single-family residence does not reach its full value because it is located in an industrial area. this illustrates the appraisal principle of a) competition. b) conformity. c) increasing and diminishing return. d) plottage.

Answer 1

Conformity is an appraisal principle which states that a property's value is based on the value of surrounding properties.

What is Conformity?

Conformity is the act of matching one's beliefs, attitudes, and behaviors to those of the people around them. It is a behavior that is driven by the desire to be accepted and fit in with one's peers. Conformity can take many forms, from simply following the norms of a group to agreeing with the majority opinion on controversial topics. While conformity can be beneficial in some situations, it can also lead to people going along with ideas that are not in their best interest.

A single-family residence located in an industrial area would be worth less than one located in a residential area because the industrial area would not be as desirable to potential buyers. The principle of conformity states that the value of a property is determined by its conformity (or lack thereof) with the prevailing market trends and values of the surrounding properties.

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