Depreciation & Cost Approach for Real Estate Valuation


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In depreciating a property, examples of a short-lived deterioration might include _____.

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1. The normal wear and tear and lessening of a building's value as it ages is called _____.

2. A method of estimating physical depreciation, where an appraiser would analyze each cause of depreciation separately, measures the amount of each and then total the estimates to indicate a lump-sum figure that is deducted from the cost new is called the _____ method.

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About This Quiz & Worksheet

Test your knowledge with these questions. Printable and available 24/7 online, the quiz and worksheet cover definitions and methods for real estate valuation.

Quiz & Worksheet Goals

Check your understanding of these topics:

  • Physical depreciation in an appraisal
  • Factor that causes a decline in value of a home
  • Defining normal wear and tear and lessening of a building's value
  • Estimating physical depreciation and its associated method
  • Example of short-lived deterioration

Skills Practiced

  • Critical thinking - apply relevant concepts to examine information about factors that cause a decline in value in a different light
  • Distinguishing differences - compare and contrast topics from the lesson, such as types of physical deterioration
  • Information recall - access the knowledge you've gained regarding physical depreciation

Additional Learning

Find out more about real estate valuation with the lesson titled Depreciation & Cost Approach for Real Estate Valuation. These areas are covered:

  • Comparing short-lived and long-lived deterioration
  • The types of obsolescence
  • Three methods of estimating physical deterioration