Property Valuation
A North Dakota property's market value is $400,000 and its replacement cost new is $350,000. This suggests the property may have experienced:
AFunctional obsolescence
BNo depreciation; the market value exceeds replacement cost✓ Correct
CPhysical deterioration exceeding its market adjustment
DExternal obsolescence only
Explanation
When market value exceeds replacement cost new, it may indicate that the market recognizes additional value in the land or unique location. It does not indicate depreciation; rather, land value and market factors drive value above replacement cost.
Related North Dakota Property Valuation Questions
- In North Dakota, properties in the Fargo-Moorhead area consistently sell within 5% of appraised value. This suggests the market is:
- What does 'highest and best use' mean in North Dakota property appraisal?
- The sales comparison approach to value requires the appraiser to:
- Market value is best defined as:
- An appraiser makes a negative (-$8,000) adjustment to a comparable. This means:
- Capitalization rate (cap rate) is calculated by:
- In North Dakota, the 'principle of conformity' suggests that:
- The principle of substitution states that a buyer will pay no more for a property than the cost of:
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