California Real Estate Salesperson Exam Practice - Question 10

Question

In comparing the cost of reproduction of two buildings of the same square footage, a two-story house usually:

Selections

• A. Costs more than a one-story house

• B. Costs less than a one-story house

• C. Costs the same as a one-story house

• D. Can't be compared with a one-story house

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Answer: B

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5 Keys Summary

1. A two-story house generally costs less to reproduce than a one-story house with the same total square footage.

2. This lower cost is due to the structure being more cost-effective to build on a per-square-foot basis.

3. The efficiency is gained by stacking the living space vertically, maximizing use "under the same roof and over the exact same foundation".

4. Since the foundation and roof are major construction expenses, a two-story house requires less foundation footprint and smaller roof surface area, lowering overall reproduction costs.

5. Reproduction cost is an estimate to rebuild an exact replica, which demonstrates that a comparable one-story building is inherently more expensive due to its larger required roof and foundation.

Explanations

When comparing two buildings with the same total square footage, a two-story house generally costs less than a one-story house to reproduce. This is because a two- or three-story home is considered more cost-effective to build on a per-square-foot basis.

The reasoning behind this is that a multi-story house can achieve the same amount of living space by building "under the same roof and over the exact same foundation" but stacked vertically. This means that for a given total square footage, a two-story house will have a smaller foundation footprint and a smaller roof area compared to a one-story house. Since the foundation and roof are major cost components in construction, reducing their size while maintaining the same overall living area typically leads to lower construction costs.

Concepts Definitions

• Cost of Reproduction: In appraisals, this refers to the estimated cost to rebuild an existing building as an exact replica using current prices for materials and labor.

• Cost of Replacement: An estimate of the cost to rebuild an older home using today's updated construction standards and prices, rather than an exact replica.

• Square Footage: The total area of livable space within a property, calculated by multiplying the length by the width of each room or area. Different areas of a house, like a garage versus living space, can have different costs per square foot.

• Foundation: The underlying base of a building, usually made of reinforced concrete, that supports the structure's weight. The widest part of the foundation is called the footing, which primarily supports the main weight.

• Roof: The covering on the top of a building. Different roof styles exist, with "hip" roofs being characterized by four sloping sides.