Property Valuation
What is 'cost to cure' analysis in real estate appraisal?
AThe cost to cure title defects before closing
BThe cost to repair a curable depreciation item; if the cost to cure is less than the resulting value increase, the item is economically feasible to cure✓ Correct
CThe appraisal fee for analyzing properties with deferred maintenance
DThe remediation cost for environmental contamination
Explanation
Cost to cure analysis evaluates whether a physical or functional deficiency is economically worth correcting. If the cost to cure (repair cost) is less than or equal to the increase in property value that would result from the repair, the depreciation is curable. If the cost exceeds the value increase, the depreciation is incurable—it's more economical to leave it alone. This analysis helps appraisers categorize depreciation as curable or incurable.
Related Illinois Property Valuation Questions
- What is 'assessed value' versus 'market value' in Illinois property taxation?
- A comparable property sold for $290,000 one year ago. Market data shows values have increased 5% in the past year. What time-adjusted value would be used for this comparable?
- An appraiser adjusting for location differences between the subject property and a comparable uses which type of adjustment?
- When an appraiser determines a value 'as if complete' for a property under construction, they are providing what type of appraisal?
- Economic (external) obsolescence is best described as a loss in value due to:
- In the cost approach to value, the formula for determining value is:
- In a buyer's market, an appraiser would expect to see:
- An appraiser uses the income approach and determines a net operating income of $75,000 with a cap rate of 6%. What is the estimated value?
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →