On a July 2026 assignment, Appraiser Omar estimates a property's replacement cost new at $450,000. He estimates accrued depreciation at 18% of the improvements, and the site value is $110,000. What is the indicated value by the cost approach?
Correct Answer
C) $479,000
Step 1: Compute depreciation on the improvements: $450,000 × 18% = $81,000. Step 2: Depreciated improvement value is $450,000 - $81,000 = $369,000. Step 3: Add site value of $110,000. The indicated value is $479,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
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When Priya inspects a 12-year-old house in March 2026, she notes peeling interior paint and badly worn carpet in an otherwise sound dwelling. Which classification best fits these items in the cost approach?
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During an August 2026 buyer consultation, Rafael asks how land is handled when an appraiser uses the cost approach for a residential property. How is site value generally treated?