Which term refers to the value of an item or feature to a property?

• A. Contribution
• B. Capitalization
• C. External Obsolescence
• D. Balance

Answer: (A)

Contribution is the value that a specific item or feature adds to a property. In appraisal, you measure contribution by the increase in the property's overall value that results from having the feature, compared to how much the property would be worth without it. This value isn’t the feature’s cost or price; it’s what buyers are willing to pay more for because the feature exists. It can be more than the cost, less than the cost, or even negative in some markets, guiding whether the improvement is worth pursuing. For example, a renovated kitchen often adds substantial value, while a pool might add little or even reduce value in a climate where pools aren’t desired. Other terms describe different ideas: capitalization relates to converting income into value; external obsolescence is depreciation from external factors; balance refers to other financial concepts, not the incremental value of a feature. So the term that best fits the description is contribution.