Property Valuation
In New Mexico, the 'cost to cure' method for functional obsolescence calculates:
AThe total replacement cost of the building
BThe depreciation attributed to a functional deficiency compared to the cost of actually correcting it — if curable, the depreciation equals the cure cost✓ Correct
CThe land value after removing functional deficiencies
DThe appraiser's fee for additional analysis
Explanation
Curable functional obsolescence is measured by the cost to cure the deficiency (e.g., adding a second bathroom). If the cost to cure is $8,000, the functional obsolescence deduction is approximately $8,000. Incurable functional obsolescence is measured by the income/sales impact.
Related New Mexico Property Valuation Questions
- Depreciation in the cost approach to value is described as:
- Which type of depreciation is considered incurable because the cost to fix it exceeds the value it would add?
- Market value in New Mexico appraisal is defined as:
- In the sales comparison approach, 'adjustments' are made to comparable properties to account for differences from the subject. If a comparable has a feature the subject lacks, the appraiser makes a:
- In New Mexico, a 'drive-by appraisal' (exterior-only inspection) may be acceptable for:
- In the sales comparison approach in New Mexico, which type of sale should be excluded from consideration as a 'comparable'?
- In New Mexico, an appraiser who determines that a property's highest and best use is different from its current use will likely:
- In a New Mexico buyer's market (high supply, low demand), how would this likely affect property values?
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