Property Valuation (alternative)
When an appraiser uses the cost approach for a newly constructed Maryland home, the land value is:
AEstimated as 20% of total value
BAppraised separately using the sales comparison approach✓ Correct
CExcluded from the final value estimate
DCalculated based on construction costs
Explanation
In the cost approach, land is valued separately (typically using the sales comparison approach for comparable land sales) because land does not depreciate like improvements.
People Also Study
Related Maryland Questions
- When an appraiser uses the income approach to value a Maryland apartment building with a NOI of $90,000 and a cap rate of 7.5%, what is the estimated value?Property Valuation
- An appraiser performing a residential appraisal in Maryland uses three comparable sales that sold 6 months ago. To adjust for market changes since the sales, the appraiser would make a:Property Valuation
- In the sales comparison approach, an appraiser makes adjustments to comparables for differences. If a comparable has a feature the subject does NOT have, the adjustment to the comparable is:Property Valuation
- An appraiser's estimate of value for a Maryland property found under the income approach is $600,000 and under the sales comparison approach is $620,000. In reconciliation for a residential property, the appraiser would most likely:Property Valuation
- A Maryland property's land is valued at $80,000 and the building (depreciated) is valued at $220,000. The total estimated value via the cost approach is:Real Estate Math
- A Maryland home appraiser finds the subject property is 200 sq ft larger than a comparable that sold for $350,000. If the value per square foot is $150, the adjusted comparable value is:Real Estate Math (alternative)
- A Maryland real estate agent who consistently uses code words like 'good schools,' 'changing neighborhood,' or 'you'll fit right in' when steering buyers is using language that:Fair Housing
- A Maryland residential building was constructed for $180,000 (excluding land) and has depreciated 25% since it was built. The current depreciated value of the building is:Real Estate Math
Key Terms to Know
Comparable Sales (Comps)
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Study This Topic
Practice More Maryland Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Maryland Quiz →