An appraisal method used to estimate the current fair market value of a real property by attempting to determine the cost of building a new property with the same utility as the property being appraised. This method assumes that an informed buyer would not pay more for the property than it would cost to build a new similar property.
“Under the cost approach to value, the appraiser attempts to determine the cost of producing a substitute property with the same utility as the subject property. Such an approach is most appropriately used either when the property contains very new improvements or when relatively unique or specialized improvements are located on the site and there are no comparable properties on the market.” Chomiak v. City of Hartford, 1994 Ct. Sup. 7686 (1994).