When cost figures come from a cost service, the appraiser should verify:
Correct Answer
B) The building class, quality and the multipliers applied
Why this is correct: Cost services provide base rates per square foot for different building classes (e.g., Class A, B, C) and quality levels (e.g., good, average). The appraiser must verify that the selected class and quality match the subject building. They must also correctly apply any time (current cost) and location multipliers to update the base rate. Why the other choices are wrong: "The service's total number of subscribers" is irrelevant to the accuracy of the estimate. "The publication date printed on the original manual edition" is less critical than applying the correct current-cost multiplier. "The names of contractors who supplied data" is not typically verifiable or required. Exam tip: The biggest error in using a cost service is misclassifying the building's quality or type. Double-check this selection.
Why This Is the Correct Answer
Why this is correct: Cost services provide base rates per square foot for different building classes (e.g., Class A, B, C) and quality levels (e.g., good, average). The appraiser must verify that the selected class and quality match the subject building. They must also correctly apply any time (current cost) and location multipliers to update the base rate. Why the other choices are wrong: "The service's total number of subscribers" is irrelevant to the accuracy of the estimate. "The publication date printed on the original manual edition" is less critical than applying the correct current-cost multiplier. "The names of contractors who supplied data" is not typically verifiable or required. Exam tip: The biggest error in using a cost service is misclassifying the building's quality or type. Double-check this selection.
More Cost Approach Questions
In a cost approach for a proposed building, the appropriate cost basis is generally:
A warehouse cost $210,000 to build when the cost index stood at 105. The index is now 210. Its indicated current cost is:
The age-life method expresses depreciation as:
Market extraction of depreciation is limited by the fact that it:
Functional obsolescence caused by a deficiency is measured as curable when:
Curable physical deterioration is measured at cost to cure because:
A 2,050 sq ft dwelling is priced at $178 per square foot with a $34,000 detached garage and $21,500 of site improvements. Cost new is:
A house has three bedrooms sharing one bathroom, and adding a second bath is economically justified. This is:
Direct costs in a construction budget include:
An appraiser writes that a 40-year-old house has an effective age of 10 but describes original wiring, original kitchen and a 25-year-old roof. The report's problem is:
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