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REAL ESTATE APPRAISAL What could cause market value to differ from the price paid for a...

REAL ESTATE APPRAISAL

What could cause market value to differ from the price paid for a property or the cost of replacing the property?

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Answer #1

There can be various reasons for cost to differ from the cost of replacing the property:

  • The location may have been better of or worse off due to a new construction or government passing a new law.
  • The residual value of land may differ when put to different uses.
  • A general inflation or rise in properties surrounding may lead to increase or a similar decrease may lead to decrease.
  • A new highway or other facilities such as a market opening nearby may also increase prices.
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