Contributory Value

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Contributory Value

In real estate, a portion of the land or the improvements on it that increases its value. For example, the contributory value of the mother-in-law suite in a back yard may increase the value of a home by $25,000.
References in periodicals archive ?
As a result of these dynamics, appraisers and originators are likely to be extremely conservative with contributory values for legal ADUs, to the point where the accuracy of valuations may be compromised.
One benefit of the income capitalization approach is it clearly assigns contributory values to each unit.
For example, one permitted ADU in Portland had estimates of contributory value that ranged from $10,000 to $100,000.
The case of a legal ADU, where an owner can receive market rent and contributory value might be estimated with the income capitalization approach, is barely addressed.
While the guidelines of government-sponsored enterprises might make it simpler to presume that a legal ADU's contributory value is incidental or insignificant, that is not likely to be an accurate assumption.
Nevertheless buyers (and by implication, the appraisers working for their lenders) seemed to be finding some value in accessory dwellings, since in every case in the study, the actual sale price was more than the contributory value (via the income capitalization approach) of the primary dwelling.
The hedonic methodology-based on explicit estimates of the contributory values of a wide range of property characteristics-allows mortgage industry professionals and anyone interested in real estate market trends to track and price constant-quality houses over time at the zip code level.
The methodology also adjusts for changes in the contributory values of the property characteristics that occur as consumer preferences change over time.