California Real Estate Practice Exam

Which method is NOT commonly used by appraisers to estimate the cost of a property?

1. Comparative square foot

2. Income approach

3. Quantity survey

4. Unit in place

The correct answer is: Comparative square foot

The correct answer identifies a method that is not typically used to estimate the cost of a property. The comparative square foot method is primarily used for analyzing and assessing property values based on recent sales of comparable properties, rather than estimating the cost of constructing or replacing a property. In real estate appraisal, the income approach, quantity survey, and unit in place methods are standard techniques used to determine a property's value based on different criteria. The income approach focuses on the potential income generated by the property, making it particularly useful for investment properties. The quantity survey method requires detailed analysis of all construction costs, considering material and labor, while the unit in place method estimates cost based on assembling units (such as plumbing or electrical installations) in place rather than a full property overview. Understanding the distinction between these methods helps clarify why the comparative square foot method falls outside the typical classification of cost-estimation strategies utilized by appraisers.