A Florida appraiser is valuing a 20-year-old single-family home in a well-established Orlando neighborhood with many comparable recent sales. The property is owner-occupied and in good condition. Which appraisal approach would typically be given the most weight in this valuation?
Correct Answer
B) Sales comparison approach
The sales comparison approach is typically given the most weight for single-family residential properties in established neighborhoods with adequate comparable sales data. The cost approach is less reliable for older properties due to depreciation factors. The income approach is primarily used for investment properties. The replacement cost approach is a component of the cost approach, not a separate method.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
More Valuation Appraisal Questions
Physical deterioration in Florida is often caused by:
The income approach to value would typically NOT be the primary approach for which of the following Florida properties?
A Florida homeowner sees a current market value estimate of $410,000 but an assessed value of only $300,000 because of long-term assessment limits. What is the dollar difference between market value and assessed value?
A Sarasota shopping center has a gross leasable area of 75,000 square feet with an average rent of $18 per square foot annually. The vacancy rate is 8%, and operating expenses are $675,000 per year. Using a 9% capitalization rate, what is the indicated value?
A Florida homeowner is porting the Save Our Homes (SOH) benefit from a previous homestead to a new one. The previous home had a just (market) value of $335,000 and an assessed value of $235,000 (a $100,000 SOH differential). The new home has a just (market) value of $425,000. Ignoring the $50,000 homestead exemption, what is the maximum assessed value of the new homestead in the first year after porting (upsizing case)?
- → A Florida appraiser is reconciling three approaches for a commercial property: Sales Comparison Approach indicates $3,200,000, Cost Approach indicates $3,800,000, and Income Approach indicates $3,400,000. If the appraiser assigns 60% weight to income approach, 30% to sales comparison, and 10% to cost approach, what is the reconciled value?
- → All of the following information should typically be included in a Florida CMA EXCEPT:
- → When appraising mobile homes in Florida, all of the following factors typically affect value EXCEPT:
- → Assume a Florida homestead is subject to a 3% Save Our Homes cap for the coming year. If last year's assessed value was $180,000, what is the capped assessed value before any exemption is subtracted?
- → A Florida homeowner's property is assessed at $450,000 for tax purposes. The property qualifies for homestead exemption and has Save Our Homes (SOH) protection with a 3% annual cap increase from the previous year's assessed value of $425,000. What is the maximum assessed value for the current tax year?
- → Under Florida law, all of the following factors must be considered when appraising agricultural property for ad valorem tax purposes EXCEPT:
- → When appraising property affected by sinkholes in Florida, all of the following factors should be considered EXCEPT:
- → A Florida licensee preparing a CMA has three adjusted comparable sale prices: $325,000, $332,000, and $338,000. What is the average adjusted indication?
- → A Florida property owner is appealing their property tax assessment. The property has a market value of $380,000, qualifies for a $50,000 homestead exemption, and has additional exemptions totaling $15,000. If the millage rate is 18.5 mills, what is the annual property tax?
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Previous Question
Scenario Granite Guide raises this Florida point. A Florida appraiser is using the income approach on a small income property with net operating income of $24,000 and an overall capitalization rate of 9.00%. What value indication results?
Next Question
An appraiser in Miami is using the cost approach to value a 5-year-old commercial building. The replacement cost new is $850,000, the land value is $200,000, and the total depreciation is estimated at $75,000. What is the indicated value using the cost approach?