Cost$/$Depreciation Case Assignment

You are appraising a $10$ year old, ranch style, $2,100$ square foot residence, with $6$ rooms, $3$ bedrooms, and $1$ bath.

Reproduction cost new is reliability estimated from a cost service at $$100$ per square foot.

The market value of the site is estimated at $$34,000$ based on a direct sales comparison approach for vacant lots. The hot water heater is leaking $($cost to replace is $$800).$ Painting at a cost of $$1000$ is immediately necessary.

The carpet is $2$ years old $($with a life of $10$ years$)$ and a cost new is $$6,000.$

The roof is $10$ years old $($with a life of $20$ years$)$ and a cost new is $$11,000.$

The appliances are $10$ years old $($with a life of $15$ years$)$ and cost new is $$2,500.$

This home has a one car garage, while other homes in the neighborhood have $2$ car garages. Cost to convert to a two car garage is $$10,000$ now, but if done when the home was constructed would have cost $$7,000($in today$$s costs$).$

The traffic noise from the location near a main traffic artery seems to result in a loss of value of $$9,000.$

Most homes in the neighborhood have two baths. Cost new to add a bathroom now is $$25,000$ whereas had it been added when built it would have cost $$20,000.$

After the physical deterioration is cured the effective age will be eight years, with a normal economic life new of $60$ years.

Estimate the cost new of the residence, after deducting for physical, functional, and economic depreciation. Remember that land is $20\%$ of total value and is taken from the market or direct sales approach and thus already includes functional and economic obsolescence.