California Real Estate Practice Exam

An appraiser would have to be able to identify land values separately in which one of the following appraisal techniques?

1. Cost approach

2. Income approach

3. Market data approach

4. All of the foregoing

The correct answer is: Cost approach

In the cost approach appraisal technique, the appraiser estimates the value of a property by considering how much it would cost to replace or reproduce it. This involves taking into account the land value separately in order to determine the total cost of the property. In contrast, the market data approach and income approach do not necessarily require the appraiser to identify the land value separately. The market data approach uses the sale prices of similar properties in the same area to determine the value, while the income approach looks at the potential income the property could generate. D is incorrect because not all of the foregoing techniques necessarily require the appraiser to identify the land value separately.