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Cost |
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Cost is the amount of money required to reproduce or replace a commodity. In real estate Cost is the total amount to reproduce or replace an improvement.
Cost is the sum of:
•The site, site improvements, and site development costs
•Labor and materials to build the improvement
•Overhead and selling costs
•Profit
If a buyer paid $100,000 for a new house, the price of the house is $100,000. The cost of the house is most likely $100,000. It is likely (but not certain) that the value of the house approximates the price and the cost of the house.
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