Property Valuation
In Missouri appraisal practice, 'accrued depreciation' is the difference between:
AMarket value and assessed value
BThe current replacement/reproduction cost of improvements and their current contribution to property value✓ Correct
CTax depreciation and physical age
DList price and sale price
Explanation
Accrued depreciation in the cost approach is the total loss in value of improvements from all causes (physical, functional, external) — the difference between what the improvements would cost to build today and what they currently contribute to value.
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Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market 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.
Math Concepts
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