Property Valuation
Under the cost approach in Virginia, if a comparable newly built home costs $350,000 to build (not including land) and the subject property has 15% depreciation, the depreciated cost of improvements is:
A$280,000
B$297,500✓ Correct
C$315,000
D$332,500
Explanation
Depreciated cost = $350,000 × (1 − 0.15) = $350,000 × 0.
People Also Study
Related Virginia Questions
- An appraiser is using the cost approach to value a Virginia home. The land is valued at $50,000, the reproduction cost of the structure is $200,000, and depreciation is estimated at $30,000. What is the indicated value?Property Valuation
- A Virginia property's replacement cost new is $350,000. It has accrued 30% depreciation. Land value is $100,000. What is the indicated value using the cost approach?Real Estate Math
- When using the sales comparison approach in Virginia, an appraiser finds that a comparable property had a swimming pool but the subject does not. The appraiser should make a:Property Valuation
- An appraiser in Richmond applies the cost approach to a 20-year-old warehouse. Total reproduction cost new is $800,000 and land value is $150,000. Depreciation is estimated at 25%. What is the value indication?Property Valuation
- A Virginia builder sells a new home for $525,000. Construction cost was $350,000 (land included). What is the builder's gross profit margin?Real Estate Math
- A Virginia seller's home cost $240,000 ten years ago. They sell for $385,000. After paying $23,100 in commission and $5,000 in other closing costs, what is their taxable capital gain?Real Estate Math
- An appraiser using the sales comparison approach in Northern Virginia adjusts a comparable sale for a feature the subject property has but the comparable lacks. This adjustment is:Property Valuation
- A buyer in Virginia purchases a home for $350,000 with a 10% down payment. The lender charges 2 discount points. What is the cost of the discount points?Real Estate Math
Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
Study This Topic
Practice More Virginia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Virginia Quiz →