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Principle of Externalities (Principe de l'environnement externe)

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Term Definition
Principle of Externalities (Principe de l'environnement externe)
In the appraisal of Real Estate the principle of Externalities states that influences outside a property may have positive or negative effect on its value. Values of real properties are directly affected by government action or inaction (interest rate controls, mortgage loan guaranties…) crime rates, population density, and income level. External influences affecting value exist at regional, city and neighborhood levels.
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