Definition of Appraisal Terms
Unique circumstances may dictate specific definitions not found below. Many terms are used to describe notions of value. The definitions offered here are to provide the fundamental concepts and are not the only acceptable definitions, since contracts may dictate a somewhat different notion. Therefore, these definitions may be expanded or redefined as the purpose and function of the appraisal may dictate as long as the fundamental concept is not altered.
Replacement Cost – New
The current new cost of replacement of identical property, or property of like kind, capable of producing equivalent benefits (results) for the owner. Determination is made from manufacturer’s sales of same or similar property and from the owner’s invoices. The values also reflect the cost of freight, and installation, but do not include any applicable taxes.