Property Valuation
When a property has a 'value in use' significantly different from its 'market value,' this commonly occurs with:
AStandard residential properties in stable markets
BSpecial-use properties (churches, schools, hospitals) that have limited marketability but high utility to a specific user✓ Correct
CVacant land in suburban areas
DProperties in foreclosure only
Explanation
Value in use is the value a specific property has to a specific user, which may differ substantially from market value (what a willing buyer would pay). Special-use properties like churches, schools, and hospitals often have high value in use to their owners but limited market value due to restricted alternative uses and a limited buyer pool.
Related Texas Property Valuation Questions
- In Texas, the 'cost approach' to value is considered most reliable for:
- A Texas appraiser performing an appraisal on a Dallas single-family home uses an automated valuation model (AVM) as supporting data. AVMs are:
- When a Texas appraiser makes a positive adjustment to a comparable sale, it means:
- If a commercial property has a net operating income (NOI) of $90,000 and comparable properties are selling at a 6% capitalization rate, the estimated value is:
- A Texas appraiser performs a 'retrospective' appraisal. This means the appraisal:
- An appraiser valuing a Texas property uses three approaches and reconciles to a final value. The cost approach gives $310,000, the sales comparison approach gives $295,000, and the income approach gives $285,000 (it's a home that is sometimes rented). The appraiser should give the MOST weight to:
- A Texas appraiser uses the cost approach to value a newly constructed commercial building. The land is valued at $150,000 and the building replacement cost is $800,000 with no depreciation (new). What is the estimated value?
- Functional obsolescence in real property refers to a loss in value caused by:
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