Property Valuation
The 'cost approach' to valuation in Arizona is most reliable and commonly used for:
AOlder homes in established neighborhoods with many comparable sales
BSpecial-use or unique properties that rarely sell (churches, schools, government buildings) and new construction where depreciation is minimal✓ Correct
CVacant land parcels without improvements
DInvestment properties with stable rental income
Explanation
The cost approach (land value + depreciated cost of improvements) is most accurate for unique properties with few comparables (churches, schools, special-use buildings) and new construction where there's minimal depreciation. For older homes with many comparables, the sales comparison approach is typically more reliable.
Related Arizona Property Valuation Questions
- Plottage (assemblage) value in Arizona real estate refers to:
- An Arizona property has 4 units each renting for $1,200/month. Using a GRM of 120, what is the estimated value?
- In the sales comparison approach, an appraiser makes 'adjustments' to comparable sales. If a comparable sale has a pool and the subject property does NOT, the appraiser would:
- Regression in real estate valuation refers to:
- The principle of conformity in real estate appraisal holds that:
- The appraisal approach most commonly used to estimate the value of single-family residential properties in Arizona is the:
- An Arizona appraiser using the cost approach estimates the value of a home as follows: land value = $80,000; replacement cost new of improvements = $220,000; accumulated depreciation = $30,000. What is the estimated value?
- An Arizona appraiser who provides an appraisal report that omits negative information to help a transaction close is committing:
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