California Real Estate Practice Exam

Which method is most useful as a check on other appraisal methods for estimating reproduction or replacement cost?

1. Square foot method

2. Unit-in-place method

3. Quantity survey method

4. Historic cost index method

The correct answer is: Historic cost index method

The historic cost index method is most useful as a check on other appraisal methods for estimating reproduction or replacement cost because it takes into account the changes in construction costs over time. The other options may not fully capture these changes and may result in an inaccurate estimate. The square foot method only considers the size of the property, while the unit-in-place method may not accurately reflect the cost of specific components. The quantity survey method can also be affected by fluctuations in construction costs and may not be as reliable for long-term estimates. The historic cost index method, on the other hand, uses historical data to adjust for inflation and is widely considered the most accurate method for estimating reproduction or replacement cost.