What is 'depreciation' in real estate appraisal (as distinct from tax depreciation)?
Why A loss in value from any cause, including physical deterioration, functional obsolescence, and external obsolescence Is Correct
Answer B: A loss in value from any cause, including physical deterioration, functional obsolescence, and external obsolescence
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
People Also Study
Related Delaware Questions
- Functional obsolescence in an appraisal refers to:Property Valuation
- External (economic) obsolescence affecting a Delaware property could be caused by:Property Valuation
- What is a Comparative Market Analysis (CMA)?Property Valuation
- A short sale in real estate occurs when:Finance
- What is 'external obsolescence' in real property appraisal?Property Valuation
- The Truth in Lending Act (TILA) requires lenders to disclose the:Finance
- The Home Mortgage Disclosure Act (HMDA) requires lenders to:Finance
- In Delaware, foreclosure is typically conducted through:Finance
Key Terms to Know
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →