Banking · Hypothetical Development Valuation Method
A valuer uses the hypothetical development method to update the valuation of delayed under-construction units. Which component must be deducted from the estimated total sales revenue to arrive at the residual land value?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The amount of security deposit collected from the initial allottees.
- 2The historical cost of land acquisition as per the original sale deed.
- 3The projected construction, marketing, and legal costs required to complete and sell the remaining inventory.✓
- 4The total amount of interest already paid by the developer to the bank.
Correct answer
The projected construction, marketing, and legal costs required to complete and sell the remaining inventory.
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