Appraiser Jordan Lee is reviewing the basic elements that must generally be present for real property to have market value. Which of the following is NOT one of those elements?
Correct Answer
B) Accrued depreciation from any cause
This is the exception because the traditional elements of value are demand, utility, scarcity, and transferability. Depreciation affects value, but it is not one of the four basic elements themselves.
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An owner spends $60,000 building a highly specialized recording studio inside a suburban starter home. Comparable sales suggest buyers would pay only about $15,000 more for the property because of that feature. Which appraisal principle best explains the result?
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