Principles of Value — The Big Eight

SUBSTITUTION: a buyer pays no more than the cost of an equally desirable alternative — the backbone of the sales-comparison approach. HIGHEST AND BEST USE: the legal, physically possible, financially feasible use producing the greatest value. CONFORMITY: similar properties hold value; PROGRESSION lifts a modest home among mansions, REGRESSION drags a mansion among cottages. CONTRIBUTION: an improvement is worth what it adds to value, not what it cost — the pool problem. ANTICIPATION: value reflects expected future benefits, powering the income approach. Plus SUPPLY & DEMAND and COMPETITION rounding out the classic list.