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Ambassador
3,987,010
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

The cost approach is not used in my area at all and is just one component to look at. Market approach is what banks and lenders want. So using cost approach alone is not a true indication of value.

Feb 26, 2017 06:24 PM
Rainmaker
4,490,514
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

As a Realtor, I don't appraise... ask an appraiser.

Feb 27, 2017 04:20 AM
Rainmaker
3,070,984
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

I'll leave that to an appraiser to explain...

Feb 27, 2017 04:07 AM
Rainmaker
1,558,356
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Sorry, I'm not an appraiser, yet, in high end area where I live, it would not be very reliable.

Feb 26, 2017 08:51 PM
Rainmaker
1,708,245
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Not that hard if you have the data.

Feb 26, 2017 06:37 PM
Ambassador
5,752,727
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Cost approach is what builders pay a lot of attention to.

If they home buyer thinks that it is worth more then there is never a problem. 

If the buyer thinks that it is worth less then we have a serious problem.

Feb 26, 2017 06:12 PM
Rainmaker
2,153,027
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

I am not an appraiser, could not answer your question. 

Feb 27, 2017 04:56 AM
Rainmaker
849,202
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Researching the current costs to get close to similar quality of items and quality of labor of original costs.

Feb 27, 2017 04:15 AM
Rainmaker
4,433,809
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

An appraiser would have the answer.

Feb 27, 2017 03:22 AM
Rainmaker
1,357,522
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Wouldn't work in CA.

Feb 26, 2017 09:55 PM
Rainmaker
3,986,000
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Knowing local costs

Feb 26, 2017 08:41 PM
Ambassador
2,608,498
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 Rarely used.   Maybe by investors, not too many others.

Feb 26, 2017 08:13 PM
Ambassador
4,743,531
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Te lenders want the market appraisal value, not cost.  See what Ron and Alexandra Seigel have to say

Feb 26, 2017 06:32 PM
Rainmaker
5,767,466
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Abby,

Market is what matters these day.  The cost approach is used for tear downs and investments.  A

Feb 26, 2017 06:30 PM
Rainmaker
1,045,215
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Market approach is what banks and lenders want. So using cost approach alone is not a true indication of value.

Feb 24, 2018 04:14 PM
Ambassador
4,316,215
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

abby tiscareno in most residential real estate, cost approach is rarely used.

It is comparable sales approach which is more often used.

Feb 27, 2017 09:29 PM
Rainmaker
808,903
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Great question for an appraiser. -Kasey

Feb 27, 2017 05:45 PM
Rainmaker
1,430,231
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

We don't use it.

Feb 27, 2017 12:46 PM
Rainmaker
1,183,850
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Where there is great variance. For example, East Palo Alto vs Palo Alto land price. 

Feb 27, 2017 11:12 AM
Rainmaker
5,580,884
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

from what I remember, the cost approach is ideal for new construction.... there is too much depreciation with anything older....

Feb 27, 2017 08:05 AM
Rainmaker
1,157,535
FN LN
Toronto, ON

This is an excellent question for appraisers.  I am not sure how many appraisers frequent this Q&A forum.

Feb 27, 2017 07:42 AM
Ambassador
3,158,194
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Well trained professionals in this field will likely not find this approach to be an issue. 

Feb 27, 2017 07:34 AM
Rainmaker
1,466,027
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

abby tiscareno Knowing the cost of the materials.

Feb 27, 2017 07:10 AM
Rainmaker
612,606
Eve Alexander
Buyers Broker of Florida - Tampa, FL
Exclusively Representing ONLY Tampa Home Buyers

Costs can vary greatly.

Eve

Feb 27, 2017 06:26 AM
Rainmaker
1,672,115
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

Please read Chapter 8, Appraisals

Feb 27, 2017 06:19 AM
Rainmaker
4,799,732
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Don't know, I'm not an appraiser.

Feb 27, 2017 05:55 AM
Rainer
74,407
Michael Scruggs
UTR Texas-Realtors - Houston, TX
ABR, CNE, TAHS

I don't use the cost approach.

Feb 27, 2017 05:51 AM
Ambassador
1,616,454
Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

great question for an appraiser

Feb 27, 2017 05:15 AM