Property Valuation
Which type of depreciation results from factors outside the property, such as proximity to a freeway or an industrial plant?
APhysical deterioration
BFunctional obsolescence
CExternal (economic) obsolescence✓ Correct
DIncurable depreciation
Explanation
External (economic) obsolescence is a loss in value caused by factors outside the property itself, such as nearby nuisances, neighborhood decline, or unfavorable zoning changes. It is always considered incurable because the owner cannot eliminate the external cause.
Related California Property Valuation Questions
- Under USPAP (Uniform Standards of Professional Appraisal Practice), a licensed appraiser must retain the workfile for a completed appraisal for a minimum of:
- What is the 'principle of contribution' in real estate?
- The principle of substitution states that:
- An appraiser determines that the highest and best use of a parcel is for commercial development, not its current residential use. How does this affect the appraisal?
- What is the 'cost approach' best suited for?
- Which federal law requires federally regulated lenders to use licensed or certified appraisers for most real estate transactions above a certain threshold?
- The income approach to value is most appropriate for which type of property?
- Which of the following is an example of functional obsolescence in a residential property?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →