Florida Real Estate Exam

Category - Florida

The replacement cost approach is easier to apply to a new building due to:

  1. Building code changes
  2. Historic costs being hard to obtain
  3. Land valuation problems
  4. Depreciation estimates
Explanation
Answer D - Depreciation is very important in the estimate of value using the replacement cost approach. The newer the building, the easier it is to determine the depreciation.

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