The Analysis of Constructions in the Evaluation Activity

Abstract

The estimation of value through the cost method is based on comparison, and namely the construction cost of a propriety is compared to the value of an existing propriety or to a similar one that is being built. The method reflects the fact that the participants on the market recognize a relation between value and cost, it is important for the estimation of the market value of new or relatively new buildings as, in this cases, the cost and the market value are usually relatively close. New or relatively new constructions represent the best usage of the terrain. Replacement cost is the estimated cost for building, given the current prices at the moment of the evaluation of a building with an equivalent utility to the one of the evaluated building.