Types of Cost

There are two types of cost analyses

 

•Reproduction cost

•Replacement cost

 

Replacement cost is the cost to construct a building with equivalent utility at current prices, materials, standards, design and layout.  Replacement cost is almost always the method of estimating cost in a residential appraisal.

 

Reproduction cost is the cost to construct an exact duplicate of a building at current prices using the same materials, standards, design, layout and quality, and embodying all the subject's deficiencies, superadequacies and obsolescence.  Reproduction cost is almost never used in a residential appraisal.  Evaluating cost by the reproduction method is not included in this course.

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