Property Valuation
What does 'depreciated cost' mean in the North Dakota cost approach to appraisal?
AThe original cost of the land minus real estate taxes
BThe cost to build the improvements new minus all forms of accrued depreciation✓ Correct
CThe income capitalized by the cap rate
DThe assessed value minus outstanding mortgage
Explanation
Depreciated cost in the cost approach = Cost new − Accrued depreciation (physical deterioration + functional obsolescence + external obsolescence). Adding land value gives the total value indication.
Related North Dakota Property Valuation Questions
- Which appraisal approach uses the formula: Value = Land Value + (Replacement Cost New - Depreciation)?
- Functional obsolescence in appraisal refers to:
- A North Dakota appraiser is making adjustments to comparable sales. If a comparable home sold for $250,000 but has an extra bathroom that the subject property lacks, the appraiser would:
- The highest and best use of a property is defined as the use that is:
- Which of the following North Dakota properties would MOST likely be valued using the cost approach?
- In the cost approach to value, reproduction cost differs from replacement cost because:
- A North Dakota property with significant deferred maintenance would be described as having:
- The income approach to value uses which formula?
Practice More North Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Dakota Quiz →