Property Valuation
In the cost approach to appraisal, 'functional obsolescence' refers to:
ADeterioration caused by age and normal wear
BLoss in value due to outdated design, layout, or features that reduce the property's utility✓ Correct
CLoss in value caused by external economic factors
DPhysical damage from natural disasters
Explanation
Functional obsolescence is a loss in value resulting from outdated or inefficient design elements — such as inadequate electrical service, outdated plumbing, poor floor plan, or lack of features typical in current market properties.
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