Property Valuation
The cost approach to value is most reliable for:
AIncome-producing apartments
BUnique or special-purpose properties where comparable sales are scarce✓ Correct
CSingle-family homes in active resale markets
DVacant commercial land
Explanation
The cost approach is most useful for special-purpose properties (schools, churches, government buildings) where market sales data is limited. It estimates value as the cost to reproduce or replace the improvements, less depreciation, plus land value.
Related Tennessee Property Valuation Questions
- Assessed value for property tax purposes in Tennessee is typically a percentage of:
- In Tennessee, the 'income capitalization approach' is best suited for valuing:
- An appraiser adjusts comparable sales for time to account for:
- The cost approach formula is: Value = Land Value + (Cost New − Depreciation). If land value is $80,000, cost new is $250,000, and total depreciation is $40,000, what is the estimated value?
- Comparative Market Analysis (CMA) is typically prepared by a:
- In the income approach, effective gross income (EGI) is calculated as:
- An appraiser determines that the subject property has 2,000 square feet and a comparable sold for $90 per square foot with 1,800 square feet. Using gross living area analysis, what does the comparable suggest the subject is worth?
- In Tennessee, the 'cost-to-cure' method of calculating depreciation assumes that:
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