As one of the three primary approaches commonly used by appraisers to value real property, the cost approach is a critical part of your appraisal knowledge base. A thorough working knowledge of the cost approach will help you produce a credible indication of value and will help provide you with the tools to do business with a wide range of clients. Your instructor, Alan Simmons, will equip you with the terminology and procedures associated with cost approach, in addition to related concepts such as alternative methods of site valuation, replacement and reproduction cost, accrued depreciation, and market extraction.
In this course, you will learn:
- The sales comparison method of site valuation and the common types of adjustments that illustrate this methodology
- Alternative modes of site valuation, including extraction, allocation, subdivision development land residual, and ground rent capitalization
- The role of the cost approach in site valuation
- The differences between replacement cost and reproduction cost
- The basic kinds of depreciation, including physical deterioration, functional obsolescence, and external obsolescence
- The breakdown method and the market extraction methods of estimating accrued depreciation