An appraiser in NC who estimates the value of a proposed new development building uses which approach as the primary method?
Why Cost approach Is Correct
Answer C: Cost approach
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
People Also Study
Related North Carolina Questions
- An appraiser estimates a home's replacement cost new at $350,000, total depreciation of 25%, and land value of $80,000. What is the cost approach value?Property Valuation
- An adjustment in the sales comparison approach for a feature the subject property HAS but the comparable does NOT have requires the appraiser to:Property Valuation
- A property has a replacement cost new of $400,000, accumulated depreciation of $60,000, and land value of $75,000. What is the cost approach value?Property Valuation
- When adjusting comparables in the sales comparison approach, the appraiser adjusts the comparable, not the subject. If a comp has a superior feature, the adjustment is:Property Valuation
- A NC property appraiser finds three comparable sales adjusted to $285,000, $291,000, and $288,000. The most likely indicated value for the subject is:Real Estate Math
- A building in Wilmington, NC has a replacement cost of $420,000 and has depreciated 25%. The lot is worth $85,000. What is the indicated value via the cost approach?Real Estate Math
- An appraiser uses a comp that sold for $320,000. The comp has a pool (value +$8,000) but lacks a garage (value -$12,000) compared to the subject. The adjusted comp value is:Real Estate Math
Key Terms to Know
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →