Property Valuation
Which of the following is an example of functional obsolescence in a residential property?
AA leaking roof caused by age and weathering
BA four-bedroom home with only one bathroom✓ Correct
CDecreased value because a new freeway was built nearby
DPaint peeling due to deferred maintenance
Explanation
Functional obsolescence is a loss in value due to a deficiency or superadequacy in the property's design or layout relative to current market standards. A four-bedroom home with only one bathroom is a classic example of a functional deficiency that reduces appeal and value compared to updated homes.
Related California Property Valuation Questions
- Which factor would most likely increase the capitalization rate an investor requires for an income property?
- External obsolescence (economic obsolescence) is caused by:
- A Comparative Market Analysis (CMA) prepared by a real estate agent is:
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- A property generates an NOI of $60,000. Comparable properties sell at a 5% cap rate. What is the indicated value using the income approach?
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- Which type of depreciation results from factors outside the property, such as proximity to a freeway or an industrial plant?
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