Property Valuation
Functional obsolescence in real estate refers to a loss in value due to:
APhysical deterioration from wear and tear
BNegative influences from outside the property
COutdated design, features, or layout within the property✓ Correct
DChanges in the neighborhood's economic base
Explanation
Functional obsolescence is a loss in value caused by outdated or deficient design features within the property itself — such as outdated floor plans, inadequate electrical systems, or insufficient closet space.
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