Yeah, you'd need to include some kind of correction term for an A > B situation.
Building value can be negative, if the costs of renovation or demolition would be greater than the value of the land.
But building value could also be positive, but less than the cost of construction. Basically "It works fine and it's worth something, but if you built it today, the value you could sell it for wouldn't cover the costs."
Basically you need to design a formula for a requirement something like: "We need to proportion the improved land value between the building and the unimproved land. The building 'should get' 10% - 90% of the value. We start with cost, if that's near the middle of the range we accept it, but toward the ends of the range we modulate it (either with hard cutoffs or softer asymptotic blending)."
Then you need a separate case for where the building is negative value. In that case you could probably get by with an inspection and cost estimates for renovation / demolition.
You could also discount a building based on its age, say 1% per year up to 70%. This represents the fact that Joe's house would cost $200k to build today, but if you did that you'd get a house that's 0 years old. Joe's actual house is 60 years old, so to guesstimate the value of that 60-year-old house we take $200k and subtract 60% to get $80k. (The 30% minimum represents the fact that even a centuries-old house in good repair has some value.) Again, after the discounting you'd apply modulation to make sure it's 10% - 90% of the total value.
Building value can be negative, if the costs of renovation or demolition would be greater than the value of the land.
But building value could also be positive, but less than the cost of construction. Basically "It works fine and it's worth something, but if you built it today, the value you could sell it for wouldn't cover the costs."
Basically you need to design a formula for a requirement something like: "We need to proportion the improved land value between the building and the unimproved land. The building 'should get' 10% - 90% of the value. We start with cost, if that's near the middle of the range we accept it, but toward the ends of the range we modulate it (either with hard cutoffs or softer asymptotic blending)."
Then you need a separate case for where the building is negative value. In that case you could probably get by with an inspection and cost estimates for renovation / demolition.
You could also discount a building based on its age, say 1% per year up to 70%. This represents the fact that Joe's house would cost $200k to build today, but if you did that you'd get a house that's 0 years old. Joe's actual house is 60 years old, so to guesstimate the value of that 60-year-old house we take $200k and subtract 60% to get $80k. (The 30% minimum represents the fact that even a centuries-old house in good repair has some value.) Again, after the discounting you'd apply modulation to make sure it's 10% - 90% of the total value.