Property Valuation
What is 'external obsolescence' in property appraisal?
APhysical deterioration of the building's exterior
BLoss in value from factors outside the property, such as a nearby industrial plant✓ Correct
COutdated architectural style
DDamage from a natural disaster
Explanation
External (or economic) obsolescence is a loss in value caused by negative influences outside the property boundaries, such as a noisy highway, nearby industrial use, or a declining neighborhood. It is generally incurable.
Related Alabama Property Valuation Questions
- An appraisal report must comply with which set of professional standards?
- A property has an annual gross income of $84,000, a vacancy rate of 5%, and operating expenses of $28,000. What is the NOI?
- The principle of 'conformity' states that:
- Which approach to value is most commonly used to appraise single-family residences?
- Which type of depreciation is associated with an outdated floor plan in a house?
- The principle of contribution states that the value of any component of a property is:
- An appraisal that understates value is called:
- A property's stabilized NOI is $78,000. If the cap rate is 7.5%, what is the indicated value?
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