Property Valuation
What is 'functional obsolescence' in real estate appraisal?
ALoss in value due to normal physical aging
BLoss in value due to changes in design, taste, or layout that make the property less desirable✓ Correct
CLoss in value due to nearby industrial development
DLoss in value due to an overimprovement relative to the neighborhood
Explanation
Functional obsolescence is a loss in value resulting from deficiencies in design, style, or layout — such as outdated floor plans, poor bedroom-to-bathroom ratios, or features that no longer appeal to buyers.
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