Principle of Conformity

This is an appraisal principle that theorizes that a home is more likely to increase in value when it conforms to other houses in the neighborhood. As long as a house is similar to other homes in the neighborhood, as it relates to condition, age, and size, it is more likely to appeal to potential buyers and thus increase in value. For example, a grandiose four-story home, located in a neighborhood of modest sized ranch-style homes, would be worth much less than if it were situated in a neighborhood of similarly extravagant homes. The modest sized homes would not invoke the same feeling of prestige for the neighborhood as would the community with much larger homes, thus decreasing the value of the four-story home. A homeowner does not want to stand out from the crowd when it comes to real estate, especially if they want to elicit top-dollar for their home at resale.