Question Details

Gene Price, Home Buyer in 77642

in the appraisal process how does cost of construction affect price and value

Asked by Gene Price, 77642 Fri Jun 6, 2008

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The appraisal can be done two ways, replacement cost or market evaluation. so if your appraisal is done by the cost method, construction costs in the local area would definitely affect it. Most appraisals are done with the market evaluation (comparing your house to other similar houses in the area that have sold in the past couple months.) If it is an odd property, a church, a mansion, or something that the appraiser cannot find a comp of, he will no doubt use the cost approach.
0 votes Thank Flag Link Sat Jun 7, 2008
That would depend on the type of construction cost you are referring to. New construction costs, Replacement cost, or Reproduction costs.
0 votes Thank Flag Link Fri Jun 6, 2008
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