Property Valuation
Functional obsolescence in a property refers to:
APhysical deterioration from age and use
BA loss in value due to features that are inadequate, outdated, or superfluous relative to current market standards✓ Correct
CA loss in value due to external economic conditions
DThe gradual expiration of a leasehold estate
Explanation
Functional obsolescence is a loss in value caused by features that fail to meet current market standards, such as outdated floor plans, obsolete fixtures, inadequate electrical systems, or features that buyers no longer desire (like too-small bedrooms or only one bathroom). It is distinguished from physical deterioration (wear and tear) and external obsolescence (outside factors).
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