Property Valuation
What is 'functional obsolescence' in property appraisal?
APhysical deterioration from wear and tear
BLoss in value due to external negative factors outside the property
CLoss in value due to outmoded design, layout, or features within the property itself✓ Correct
DIncrease in value due to renovations
Explanation
Functional obsolescence is a loss in value caused by something inherent to the property itself, such as an outdated floor plan, inadequate plumbing, or features no longer desired by buyers (e.g., only one bathroom in a large home).
Related Alabama Property Valuation Questions
- Effective gross income (EGI) for an investment property is calculated as:
- Functional obsolescence due to a feature that costs more to cure than the value it adds to the property is called:
- In a declining market, a time adjustment to comparable sales would generally be:
- The principle of balance in real estate states that maximum value is achieved when:
- In the sales comparison approach, the subject property is compared to which of the following?
- Which organization sets minimum qualification standards for state-certified and licensed real estate appraisers?
- An appraisal that understates value is called:
- An adjustment of +$10,000 is made to a comparable because the comparable has one fewer bathroom than the subject. This means the appraiser believes the extra bathroom contributes approximately $10,000 in value. This type of analysis is:
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