California Real Estate Practice Exam

The estimated cost to build a 200-year-old house using modern materials and methods is known as its?

1. Actual cost

2. Depreciated cost

3. Replacement cost

4. Historic cost

The correct answer is: Replacement cost

The estimated cost to build a 200-year-old house using modern materials and methods is known as the replacement cost. This term refers to the cost required to replace or rebuild a structure using modern materials and construction methods, rather than the original historic materials and methods. While the actual cost may vary depending on market factors and the final cost of construction, the replacement cost is an estimate that takes into account the current value of materials and labor. The historic cost, on the other hand, refers to the actual cost of building the house 200 years ago and may not accurately reflect the current value of the structure. Depreciated cost is a term that is typically used to refer to the reduction in value of a property due to wear and tear or obsolescence over time, and is not applicable to the cost of building a new structure. Therefore, the replacement cost is the most accurate and useful measure