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?
Correct Answer
B) $3,380,000
Weighted reconciliation: ($3,400,000 × 0.60) + ($3,200,000 × 0.30) + ($3,800,000 × 0.10) = $2,040,000 + $960,000 + $380,000 = $3,380,000.
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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.
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The income approach to value would typically NOT be the primary approach for which of the following Florida properties?
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