On a September 2026 appraisal, Appraiser Chloe estimates replacement cost new of a dwelling at $270,000 and of a detached garage at $12,000. The site value is $70,000, and total accrued depreciation is $40,000. What indicated value does the cost approach produce?
Correct Answer
D) $312,000
Step 1: Add the improvement costs: $270,000 + $12,000 = $282,000. Step 2: Deduct total accrued depreciation of $40,000 to get $242,000 for the depreciated improvements. Step 3: Add site value of $70,000. The indicated value is $312,000.
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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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Previous Question
In a 2026 appraisal assignment, a home in a modest subdivision has an elaborate indoor basketball court that cost far more to build than buyers in that market are willing to pay for it. In the cost approach, this is most likely treated as what?
Next Question
In July 2026, Appraiser Elena is valuing a 70-year-old home with several additions, mixed-quality renovations, and no clear market evidence for how buyers react to each older feature. What limitation of the cost approach is most relevant?