Property Valuation
Functional obsolescence in Minnesota real estate refers to:
APhysical deterioration of the structure over time
BLoss of value due to external factors such as nearby nuisances
CLoss of value due to outdated or inadequate design features within the property✓ Correct
DAppreciation due to market improvements
Explanation
Functional obsolescence is a loss of value caused by outdated design, inadequate features, or poor floor plans within the property itself. Examples include outdated kitchens, insufficient bathrooms for a large home, or floor plans that no longer meet market expectations.
Related Minnesota Property Valuation Questions
- In Minnesota, the 'reconciliation' step in the appraisal process involves:
- A Minnesota appraiser adjusts a comparable sale for time. The comparable sold 8 months ago and the market has been appreciating at 0.5% per month. What is the time adjustment for a $300,000 comparable?
- In the cost approach, the appraiser estimates land value separately from improvements because:
- The principle of anticipation in Minnesota real estate valuation states that:
- In Minnesota, 'market value' as used in appraisal practice is best defined as:
- A Minnesota appraiser finds that the subject property's neighborhood has been experiencing rapid price increases over the past 12 months. How does this affect the appraisal?
- In Minnesota, the cost approach uses reproduction cost vs. replacement cost. What is the difference?
- A Minnesota buyer is purchasing a small strip mall and wants a cap rate analysis. The property has gross income of $120,000, vacancy allowance of $12,000, and operating expenses of $42,000. With a purchase price of $880,000, what is the cap rate?
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →