MARKET & COST APPROACH IN VALUATION CHAPTERS 3 & 4
Types of Market
There are three types of real estate markets you can find yourself in locally:
a buyer’s market,
a seller’s market,
or a balanced market.
The exact market you’re in should inform your approach as you choose investments, make offers, and negotiate deals.
Here’s what these markets look like:
A buyer’s market is one in which there are more properties for sale than there are buyers.
This means home buyers have the upper hand……..
Cost Approach to Value – Methods of Cost Estimates for Buildings –
Life of Building: Economic/Physical/Legal –
Factors affecting life of the building –
Total Life, Age, Estimating Future Life –
Various methods of Computation of Depreciation,
Functional, Technological and Economic Obsolescence –
Reproduction Cost/Replacement cost,
Depreciated Replacement Cost (DRC) working, adopting DRC as Value subject to Demand
and Supply aspect –
Land Value by Market Approach and Building Value by Cost Estimation Method for
Owner Occupied Bungalows, Factories, Public Buildings….
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