Which formula best represents the cost approach to appraisal?
Correct Answer
B) Replacement cost minus depreciation plus land value
The cost approach to appraisal estimates property value by calculating the replacement cost of the improvements, subtracting accrued depreciation, and then adding the value of the land. The formula is: Value = Replacement Cost − Depreciation + Land Value.
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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.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
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- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
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- → Which four criteria must ALL be met for a use to qualify as the highest and best use of a property?
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