Property Valuation
In the cost approach, what is 'reproduction cost' vs. 'replacement cost'?
AThey are identical terms
BReproduction cost = cost to build an exact replica; replacement cost = cost to build a building with equivalent utility using modern materials/methods✓ Correct
CReplacement cost is always higher than reproduction cost
DReproduction cost uses modern materials; replacement cost uses original materials
Explanation
Reproduction cost is the cost to build an exact duplicate of the subject property using the same materials and methods. Replacement cost is the cost to build a structure with equivalent utility using modern materials and techniques. Appraisers most commonly use replacement cost.
Related California Property Valuation Questions
- Which of the following factors does NOT directly affect a property's market value?
- A Competitive Market Analysis (CMA) prepared by a real estate licensee differs from a formal appraisal in that:
- Gross Rent Multiplier (GRM) is calculated as:
- In the cost approach, 'reproduction cost' differs from 'replacement cost' because:
- An appraiser uses the 'before and after' method when appraising property affected by:
- The Uniform Standards of Professional Appraisal Practice (USPAP) are developed and maintained by:
- The principle of 'anticipation' in real estate valuation states that:
- In the sales comparison approach, the appraiser makes adjustments to the comparable sales to account for differences from the subject property. If a comparable has a feature the subject lacks, the adjustment is:
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →