Property ValuationIntermediateDelaware Exam
What is 'external obsolescence' in a Delaware appraisal?
ALoss in value from outdated building design
BLoss in value caused by factors outside the property, such as a nearby highway, declining neighborhood, or economic conditionsCorrect
CSimply the ordinary physical deterioration visible only on the exterior surfaces of a building, subject to the usual exceptions
DDamage caused by external weather events
Why Loss in value caused by factors outside the property, such as a nearby highway, declining neighborhood, or economic conditions Is Correct
Answer B: Loss in value caused by factors outside the property, such as a nearby highway, declining neighborhood, or economic conditions
External (economic) obsolescence is a loss in value caused by factors outside the property boundaries, such as nearby incompatible land uses, economic decline, or changes in the neighborhood. It is typically incurable.
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
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