Halp Engineered hardwood flooring is a bag of crap

Depends on the appraisal price, but a house like that would easily cost $150-200k to build from the foundation up. It'd be cheaper if he kept the studs, but even portions of the foundation had issues.

We were looking at a house where the appraisal came in low at $450k but the cost approach (cost to build new with like materials) came in at $525k. So it just depends.

Cost approach is probably the most useless approach unless you're appraising something brand new and unusual like custom homes. In appraisals of older homes, the cost approach often comes out too high because there is another thing at work here.

The appraiser has to generate an opinion of remaining economic life for the improvements which is then used to form a deduction for incurable depreciation. Appraisers tend to shoot high on remaining economic life because if they say it's less than 30 years, that will kill a loan. So often times, you've got buildings where the expected life is 40 years, and it's already 25 years old, but the appraiser will say it's effectively 10 years old. All to make the loan go through -- and besides, people live in turdy housing long past what the market considers the improvement's economic life.
 
You think the selling price is equal to construction costs? You are confused.
Honestly, it depends. Usually when you're making alterations to an existing home, you don't get dollar for dollar on a value added basis.

But in land deals where a developer comes in an builds a home and then sells it, well, obviously the improvements add more than dollar per dollar. Or else that developer would be doing something else with his life.