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cost approach

  1. Andrei Fin

    Cert #4 and the Cost Approach

    Cert #4 of Fannie's URAR states that: "I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value." So what are we to make of an appraiser who gave some weight to the cost approach in the final...
  2. Have Laser-Will Travel

    Is The Cost Approach Flawed?

    As soon as the word "value" is used, to me it all goes back to the market because people decide on value. The cost approach doesn't exist in a vacuum, not if it's going to be relevant. From there, I suppose the underlying assumption of the cost approach is one of substitution, that the market...
  3. smorabito

    High Quality, New Construction Appraisal

    Hi all, I am not an appraiser, however after spending a couple days on these forums I'm starting to think I might qualify for a new degree. Here's my situation. I'm looking to get a construction loan for my primary residence in a high-end neighborhood. I'll either be tearing down or adding...
  4. I

    Cost Approach For Nnn Retail, Very Low Compared To Income And Sales

    I have a proposed retail building, all pre-leased at roughly $25.00 per foot NNN. These are good, national and franchise tenants, with minimum 10-year leases, and all similar recent sales have cap rates at 7.5% or lower. So even with vacancy and expenses (management, structural repairs), I...
  5. Wayne Henry

    Replacement Cost On Cost Approach Versus Market Value

    Replacement cost on cost approach versus market value In general, when dealing with an older home in a non declining market, would the replacement cost in the cost approach be lower or higher than the market value in the sales comparison approach. One school of thought on this issue is why...
  6. L

    Cost Approach In New Construction

    I am a reviewer for a federally insured bank. In this particular assignment, because there was new construction involved, we requested that the appraiser include the cost approach in his analysis. The appraiser argued that no one considers the cost approach anymore. It's not the first time...
  7. B

    Sufficiency Of Cost Approach?

    Questions for you reviewers... How thorough does the cost approach have to be to be considered "sufficient"? Here is an example from Marshall & Swift's swiftestimator plugin for TOTAL from a la mode. Comments on the left hand side of the cost approach indicate "See Data Entry Report for...
  8. M

    Mandatory Cost Approach

    Just about all my clients are now requiring the Cost Approach. As we know, this is only useful for new or recent construction. Does anyone have any verbiage they use when explaining in the Reconciliation why the Cost Approach is not relevant other than "difficulty in estimating depreciation"...
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