A licensed appraiser in Sarasota is appraising a historic courthouse that the city plans to convert into a community center. The building is 80 years old, has architectural significance, and will not generate income. Which appraisal approach is most appropriate for this assignment?
Correct Answer
B) Cost approach
The cost approach is most appropriate for unique, special-purpose properties like historic courthouses where comparable sales are unlikely to exist and income generation is not the purpose. The cost approach can account for the reproduction cost of the historic features. Sales comparison approach would lack adequate comparable properties for such a unique, special-purpose building. Income approach is inappropriate as the building will not generate income as a community center. Mass appraisal approach is used for large numbers of similar properties, not individual unique buildings.
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Previous Question
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?
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When applying the cost approach in Florida, an appraiser must consider all of the following types of depreciation EXCEPT: