Property Valuation
What is 'functional obsolescence' as used in real estate appraisal?
APhysical deterioration caused by normal wear and tear
BLoss in value due to negative influences outside the property boundaries
CLoss in value caused by outdated features or poor design that reduces the property's utility✓ Correct
DDepreciation from environmental contamination on the property
Explanation
Functional obsolescence is a loss in value caused by deficiencies or superadequacies in the property's design, layout, or features relative to current market standards. Examples include a 4-bedroom home with only one bathroom or a floor plan that is no longer desirable.
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