The principle of ________ affirms that value is created by expected benefits to be derived in the future.

The principle of ________ affirms that value is created by expected benefits to be derived in the future.

• A. Anticipation
• B. Conformity
• C. Progression
• D. Substitution

Answer: (A)

The principle of anticipation is based on the idea that the value of a property is determined by the benefits it is expected to provide in the future. This concept is fundamental in real estate, as buyers and investors often make decisions based on their expectations of future income, rent, or appreciation in property value. For instance, if a property is located in an area with plans for future development or infrastructure improvements, the anticipated increase in desirability and utility can elevate its current value. Understanding this principle helps real estate professionals assess market trends and guide buyers in making informed decisions that align with future expectations. While conformity, progression, and substitution are important concepts in real estate valuation, they do not focus primarily on future expected benefits. Conformity addresses how property values can be influenced by surrounding properties, progression deals with the value changes due to an increase in neighborhood quality, and substitution involves the idea that a buyer will not pay more for a property than for a comparable one. None of these concepts emphasize the anticipation of future benefits as directly as the principle of anticipation does.

The principle of anticipation is based on the idea that the value of a property is determined by the benefits it is expected to provide in the future. This concept is fundamental in real estate, as buyers and investors often make decisions based on their expectations of future income, rent, or appreciation in property value.

For instance, if a property is located in an area with plans for future development or infrastructure improvements, the anticipated increase in desirability and utility can elevate its current value. Understanding this principle helps real estate professionals assess market trends and guide buyers in making informed decisions that align with future expectations.

While conformity, progression, and substitution are important concepts in real estate valuation, they do not focus primarily on future expected benefits. Conformity addresses how property values can be influenced by surrounding properties, progression deals with the value changes due to an increase in neighborhood quality, and substitution involves the idea that a buyer will not pay more for a property than for a comparable one. None of these concepts emphasize the anticipation of future benefits as directly as the principle of anticipation does.