Property Valuation
An appraiser using the cost approach to value a property would:
ACompare the property to recent sales of similar properties
BCapitalize the property's net operating income
CEstimate land value plus the cost to replace improvements minus depreciation✓ Correct
DUse only the assessed value from the tax records
Explanation
The cost approach estimates value as: Land Value + Replacement Cost New of Improvements − Accrued Depreciation. It is most useful for new construction, special-use properties, and when comparable sales data is limited.
Related Connecticut Property Valuation Questions
- A Connecticut property is in a neighborhood where similar homes recently sold for $450,000–$480,000. The appraiser's final value opinion of $465,000 falls in the middle of this range. This is an example of:
- The income approach to value is LEAST appropriate for:
- A Connecticut appraiser identifies three comparable sales. After adjustments, the indicated values are $490,000, $495,000, and $492,000. The appraiser gives greatest weight to the most comparable sale, arriving at a final value of $492,000. This is called:
- A 'paired sales analysis' is used by appraisers to:
- In Connecticut, a property owner who disagrees with their assessment may file an appeal with the:
- The 'effective age' of a building used in the cost approach refers to:
- A Connecticut property sold 8 months ago for $480,000. Since then, market values have increased 3%. What is the time-adjusted market value?
- A Connecticut home was purchased for $450,000. The owners have made $30,000 in improvements. Market values in the area have increased 12% since purchase. What is the approximate current market value?
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