Property Valuation
In Minnesota, 'functional utility' as an appraisal concept refers to:
AThe property's tax utility to the county
BThe ability of the property to perform its intended function efficiently✓ Correct
CThe utility company's access to the property
DThe property's usefulness only for agricultural purposes
Explanation
Functional utility refers to the ability of a property—its design, layout, and systems—to serve the purpose for which it was built. A home with a functional floor plan, adequate bedrooms and bathrooms, and modern systems has good functional utility. Functional obsolescence occurs when a property lacks adequate functional utility for its intended use.
Related Minnesota Property Valuation Questions
- The principle of anticipation in Minnesota real estate valuation states that:
- A Minnesota property has a gross annual income of $120,000, a 7% vacancy rate, and operating expense ratio of 40% of EGI. What is the NOI?
- In Minnesota, the cost approach uses reproduction cost vs. replacement cost. What is the difference?
- Appraisers in Minnesota use 'paired sales analysis' to:
- A property in the Minneapolis-St. Paul metro sells for significantly more than similar properties in a rural Minnesota county. This is primarily explained by:
- In the cost approach, the appraiser estimates land value separately from improvements because:
- In a declining market, a Minnesota appraiser using the sales comparison approach should:
- In Minnesota, the 'net adjustments' in the sales comparison approach should generally be:
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