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- The cost approach is another method an appraiser may use to develop an opinion of value. In a nuts., it 's a breakdown of what it would cost to rebuild the property today if it were destroyed. But it 's not that cut and dry-you also have to take into consideration the value of the land and deduct for any depreciation..

The cost approach is a real estate valuation method that surmises that the price a buyer should pay for a piece of property should equal the cost to build an equivalent building. In cost approach appraisal, the market price for the property is equal to the cost of land plus cost of construction, less depreciation.. Verifying market and income based valuations: Most appraisers know that using the Cost Approach is an essential method for appraising one-of-a-kind and .In real estate appraisal, the cost approach is one of three basic valuation methods.[1] The others are market approach, or sales comparison approach, and income approach..Three approaches to value are used by appraisers to determine Market Value of property: the cost approach, the income approach and the sales comparison approach. The .

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