Property Valuation
What does 'functional obsolescence' mean in property valuation?
APhysical deterioration from normal wear and tear
BA loss in value due to outdated design features or inadequate/superadequate components✓ Correct
CA decline in value caused by nearby negative influences
DThe depreciation of improvements over their useful life
Explanation
Functional obsolescence is a loss in property value due to outdated or inadequate design features, or features that are excessive for the market (superadequacy). Examples include outdated floor plans, outdated kitchens or bathrooms, inadequate electrical systems for modern needs, or a 4-car garage in a neighborhood of modest homes. It can be curable or incurable.
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