What is 'cost of development' approach to land valuation in Delaware?
Why Estimating land value by determining what a developer can afford to pay based on projected revenues from development minus all development costs and required profit Is Correct
Answer B: Estimating land value by determining what a developer can afford to pay based on projected revenues from development minus all development costs and required profit
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
People Also Study
Related Delaware Questions
- A Delaware property's land is worth $75,000 and the improvements have a replacement cost of $280,000. Accumulated depreciation on improvements is $42,000. What is the property's indicated value by cost approach?Real Estate Math
- A Delaware property has a replacement cost of $550,000, accrued depreciation of $110,000, and land value of $120,000. What is the indicated value by cost approach?Real Estate Math
- A Delaware property has land value of $80,000 and improvements with a replacement cost of $320,000. The improvements have accumulated depreciation of 30%. What is the total estimated value using the cost approach?Real Estate Math
- What is 'residual land value' analysis in Delaware real estate development?Property Valuation
- A Delaware property has land value of $95,000. The improvements have a replacement cost of $375,000, effective age of 10 years, and 40-year economic life. Using the cost approach, what is the estimated total property value?Real Estate Math
- The sales comparison approach to value is most appropriate for:Property Valuation
- A property has a replacement cost of $400,000, accrued depreciation of $80,000, and land value of $100,000. What is the estimated value using the cost approach?Property Valuation
- What is 'entrepreneurial profit' in the cost approach to Delaware appraisal?Property Valuation
Key Terms to Know
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Math Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →