Cost estimates are useful only in the cost approach to value.

Question

Quizplus · Accepted Answer

Cost estimates can be used in other approaches to value, such as the income approach and the sales comparison approach. In the income approach, cost estimates may be used to estimate the cost of replacing improvements or to estimate the cost of deferred maintenance. In the sales comparison approach, cost estimates may be used to determine if a property is priced above or below its replacement cost.

Cost Estimates Are Useful Only in the Cost Approach to Value