Which principle applies when making adjustments to comparable properties?

When making adjustments to comparable properties, the principle of contribution is fundamental. This principle posits that the value of any particular component of a property—such as an extra bedroom, a basement, or a swimming pool—contributes to the overall value of the property but only to the extent that the additional features are valued by the market.

Therefore, when appraisers are comparing properties, they assess how different attributes of each property affect their overall worth. If one property has an extra feature, the appraiser will adjust the value of that property down or up based on how much buyers in that market are willing to pay for such features. This ensures that the adjusted value reflects a fair comparison based on contributions that each aspect makes to the overall market value.

In contrast, some of the other principles mentioned, like the principle of substitution, while relevant in the appraisal process, focuses more on the idea that a buyer will not pay more for a property than what it would cost to purchase an equally desirable substitute property. This principle does influence overall market value but does not specifically address the adjustment process in the way that the principle of contribution does.