Property Valuation
In Washington, a residential property's 'replacement cost new' (RCN) is best estimated using which method for an appraiser?
AThe county assessor's current assessed value
BCost data services (Marshall & Swift, Craftsman, etc.) that provide current construction cost data by building type and quality✓ Correct
CThe MLS listing price of comparable homes
DThe original construction cost adjusted for inflation
Explanation
Appraisers use professional cost data services (such as Marshall & Swift/Boeckh or Craftsman Book Company) that provide current construction cost data broken down by building type, quality class, and local market area to estimate Replacement Cost New.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Math Concepts
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