Property Valuation
In the cost approach, 'reproduction cost' differs from 'replacement cost' in that:
AReproduction cost is always lower than replacement cost
BReproduction cost is the cost to build an exact replica; replacement cost is the cost to build a structure with equal utility using modern materials✓ Correct
CReplacement cost accounts for depreciation; reproduction cost does not
DThere is no difference between the two terms
Explanation
Reproduction cost is the cost to construct an exact duplicate of the existing building with the same materials and methods. Replacement cost is the cost to construct a building of equal utility using current materials and construction standards. Appraisers typically use replacement cost to avoid including functional obsolescence in the base cost.
Related New Hampshire Property Valuation Questions
- A NH appraiser who uses the sales comparison approach for a new lakefront home would primarily select comparables that are:
- When comparing NH residential properties for the sales comparison approach, an appraiser should use comparables that:
- A NH appraiser who adjusts a comparable sale upward for the subject having a superior location is making what type of adjustment?
- In NH, the assessed value for property tax purposes may differ significantly from market value because:
- An appraiser in NH uses a 'market extraction' method to determine the cap rate for a commercial property. This involves:
- An appraiser preparing a market value estimate for a NH residential property uses market data as of the 'effective date' of the appraisal. The effective date is:
- A NH appraiser who values a property 'subject to' completion of planned improvements is providing:
- A NH appraiser performing a desktop appraisal (no physical inspection) should be aware that:
Practice More New Hampshire Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Hampshire Quiz →