Which of the following is NOT listed as a principle of real property value?

Which of the following is NOT listed as a principle of real property value?

• A. Balance
• B. Substitutions
• C. Highest and Best Use
• D. Liquidity

Answer: (D)

Liquidity describes how quickly a property can be converted to cash and affects marketability, not the amount of value assigned to the property. Real property value is guided by principles like substitution, which sets a ceiling based on a comparable substitute; highest and best use, which identifies the most profitable legal use of the site; and balance, which looks at how well the property fits with the surrounding area. Because liquidity influences how easily a property can be sold rather than what its value should be given its characteristics and use, it is not considered a principle of real property value.

Liquidity describes how quickly a property can be converted to cash and affects marketability, not the amount of value assigned to the property. Real property value is guided by principles like substitution, which sets a ceiling based on a comparable substitute; highest and best use, which identifies the most profitable legal use of the site; and balance, which looks at how well the property fits with the surrounding area. Because liquidity influences how easily a property can be sold rather than what its value should be given its characteristics and use, it is not considered a principle of real property value.