Property Valuation
In the cost approach to value, the appraiser estimates the value of land separately because:
ALand appreciates but buildings depreciate✓ Correct
BLand can be financed separately from improvements
CLand is always worth more than improvements
DLenders require separate land valuations
Explanation
Land is valued separately in the cost approach because land does not depreciate — it is considered permanent and indestructible. Buildings and improvements lose value through physical deterioration, functional obsolescence, and external obsolescence.
Related West Virginia Property Valuation Questions
- A West Virginia appraiser who finds very few comparable sales must consider using:
- In West Virginia, an appraiser who uses the sales comparison approach and makes adjustments for financing terms is accounting for which factor?
- What does 'highest and best use' mean in real estate appraisal?
- The 'band of investment' technique in West Virginia real estate is used to:
- What is the difference between reproduction cost and replacement cost in the West Virginia cost approach?
- A West Virginia property owner hires an appraiser to estimate value for a potential sale. The 'scope of work' in the appraisal assignment refers to:
- In the income approach, a West Virginia appraiser uses an overall capitalization rate (OAR). A lower OAR applied to the same NOI results in a:
- A West Virginia income-producing property generates a net operating income (NOI) of $60,000 annually. If the capitalization rate is 8%, the estimated value is:
Practice More West Virginia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free West Virginia Quiz →