California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Practice this question and more.

The estimated value of a property with a reproduction cost of $280,000, accrued depreciation of $60,000, and land valued at $70,000 is:

$290,000
$300,000
$250,000
$350,000

The correct answer is: $290,000

To determine the estimated value of the property, you need to account for the reproduction cost, accrued depreciation, and the value of the land. The process involves calculating the value of the improvements on the property (the buildings) after accounting for depreciation, and then adding the value of the land. First, start with the reproduction cost of the property, which is $280,000. Next, subtract the accrued depreciation, which is $60,000: $280,000 (reproduction cost) - $60,000 (accrued depreciation) = $220,000 (value of the improvements). Then, add the value of the land, which is $70,000: $220,000 (value of the improvements) + $70,000 (land value) = $290,000 (estimated value of the property). Therefore, the correct estimated value of the property is $290,000. This represents the correct approach by combining the adjusted value of the improvements with the land value to arrive at a comprehensive property value, which aligns with standard appraisal methods. Other options do not accurately reflect the calculated value based on the given figures.