Property Valuation
A Colorado appraiser who determines a property has 'functional obsolescence' due to an outdated kitchen layout should:
AA. Add value to the property for its vintage character
BB. Apply a downward adjustment in the cost approach to reflect the loss in value caused by the functional deficiency✓ Correct
CC. Ignore the obsolescence
DD. Only note the obsolescence without adjusting value
Explanation
Functional obsolescence is a loss in value caused by a deficiency or superadequacy within the property — such as an outdated floor plan, insufficient bathrooms, or inadequate electrical capacity. In the cost approach, the appraiser deducts functional obsolescence from the depreciated cost. In the sales comparison approach, the appraiser adjusts comparables that don't share the deficiency.
Related Colorado Property Valuation Questions
- A Colorado appraiser is asked to do a 'drive-by' (limited scope) appraisal rather than a full interior appraisal. This is an example of:
- What does 'reconciliation' mean in the appraisal process?
- The sales comparison approach to value is most commonly used for:
- A Colorado appraiser who has a personal relationship with the lender who ordered the appraisal, which could influence their judgment, must:
- The gross rent multiplier (GRM) for a small residential rental property in Colorado is calculated as:
- An appraiser performing an appraisal for a divorce proceeding in Colorado must:
- An 'arm's length transaction' in Colorado real estate appraisal means:
- The 'effective age' of a building in Colorado appraisal refers to:
Practice More Colorado Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →