A seasonal factory odor produces a verified 4% discount in otherwise comparable sales. The subject’s preliminary value excludes that effect. What treatment is appropriate?
Correct Answer
B) A deduction reflecting the measured 4% market reaction
The question expressly supplies an isolated, verified 4% market penalty not already included in the preliminary value. Apply that supported effect once to its compatible unaffected base. Seasonality alone does not eliminate it, while a standard nuisance percentage or enforcement referral is not valuation support.
Why This Is the Correct Answer
The question expressly supplies an isolated, verified 4% market penalty not already included in the preliminary value. Apply that supported effect once to its compatible unaffected base. Seasonality alone does not eliminate it, while a standard nuisance percentage or enforcement referral is not valuation support.
More Cost Approach Questions
Why can equivalent-utility replacement cost be useful for an obsolete improvement?
An appraiser estimates the current replacement cost new of the improvements at $890,000, accrued depreciation from all causes at $170,000, and land value at $325,000. All necessary cost components and depreciation are included in those amounts. What is the indicated property value?
Improvement cost new is $595,000. Separately supported improvement depreciation deductions of $48,000, $27,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $155,000, already reflecting any site losses. What total indicated value results?
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Previous Question
The current cost new of the improvements is $680,000. Straight-line physical depreciation is 14/56 of cost new. In addition, an annual net income loss of $12,000 is attributable only to the improvements and is not included in physical depreciation; the appropriate capitalization rate for this loss is 8%. There are no other losses, and land is excluded. What amount remains for the improvements after both deductions?
Next Question
The monthly gross rent loss at the subject property is $250, and the monthly multiplier applicable to this loss is 110. What is the indicated loss in value of the whole property, before any allocation between site and improvements?