Property Valuation
An appraiser in Taos uses the cost approach to value a new adobe home. Which of the following would be included in the cost estimate?
ALand value only
BCost of construction (labor and materials) plus land value, minus depreciation✓ Correct
COnly comparable sales
DThe property's income capitalized at the market rate
Explanation
The cost approach = Land Value + Replacement/Reproduction Cost New of Improvements - Accrued Depreciation. For a new home, depreciation is minimal, making the cost approach highly relevant.
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