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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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?