The open market is a beautiful thing, really. A business might build widgets and those widgets might be the best widgets around but it's the consumer that determines how much those widgets are really worth. While a widget builder can perform their own due diligence regarding how much a widget should sell for it's the open market that will determine the true price.
The same might be said for a real estate appraisal. While a seller may thing a home is worth a certain amount, until that home is placed on the market and an offer is made there really is no way of knowing until the buyer and seller come together and agree upon a price. But the appraisal has two values, the market value which reflects the sales price and the cost value which places yet another value on the home. What is the cost approach to valuation?
There actually two valuations in a residential appraisal and ฝากขายทาวน์เฮ้าส์ while lenders use the market value when considering a long request the cost approach is also calculated by the same appraiser. The cost approach will consider the approximate value of the lot on which the property rests then calculates an estimate on how much it would cost to build the house as if it were brand new.
This calculation will include soft costs such as permits and fees as well as hard costs such as labor, hammers and nails. This amount is presented as a cost per square foot. After reaching a cost per square foot value the appraiser may make an adjustment based upon the age of the home and factor in any depreciation on the theoretical value.
The cost approach to valuation will be on every residential application and while not used by the lender while approving the loan the insurance company providing coverage on the property will certainly pay attention to the cost number as the insurer wants to know approximately how much it would cost to rebuild the home. The insurance agent uses the cost number. The lender uses the market value.
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