Property Valuation
When an appraiser uses the cost approach, what is added to the site value to determine the property's total value?
AThe property's net operating income
BThe depreciated replacement cost of the improvements✓ Correct
CThe assessed value of the building
DThe original construction cost with inflation adjustment
Explanation
In the cost approach: Value = Site (land) Value + Depreciated Cost of Improvements. The appraiser estimates the replacement cost new of the improvements, then deducts all forms of accrued depreciation, and adds the result to land value.
Related Oklahoma Property Valuation Questions
- The Uniform Appraisal Dataset (UAD) standards used on Fannie Mae/Freddie Mac forms affect Oklahoma residential appraisals by:
- In Oklahoma, the sales comparison approach requires an appraiser to identify recent, comparable sales. Which of the following would be the BEST comparable for a 3-bedroom, 2-bath ranch home in Edmond?
- An Oklahoma appraiser is valuing a property that was recently sold in an auction under distress conditions at a price well below comparable sales. The appraiser should:
- The 'plottage' concept in Oklahoma real estate appraisal refers to the increased value that results from:
- When an Oklahoma appraiser identifies an 'overimprovement' on a property, they are identifying:
- In Oklahoma, a county assessor values property for ad valorem tax purposes. Residential property is typically assessed at:
- An Oklahoma appraisal that comes in below the contract price can result in:
- The principle of 'substitution' is the foundation of all three appraisal approaches because it states:
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