Property Valuation
In Montana property valuation, 'economic obsolescence' refers to:
APhysical wear and tear on the structure
BOutdated design features that reduce value
CLoss in value due to external factors outside the property, such as a nearby industrial development✓ Correct
DThe natural aging of building materials
Explanation
Economic (or external) obsolescence is a loss in value caused by factors external to the property itself, such as a new industrial facility nearby, declining neighborhood, or negative economic conditions.
People Also Study
Related Montana Questions
- In Montana, 'Automated Valuation Models' (AVMs) such as online home value estimators are:Property Valuation
- Economic obsolescence (external obsolescence) in a Montana property context would best be illustrated by:Property Valuation
- External obsolescence differs from functional obsolescence because external obsolescence is caused by:Property Valuation
- In Montana, 'chlorinated solvents' such as trichloroethylene (TCE) found in groundwater near industrial properties:Environmental
- In Montana, a title insurance policy insures against loss from defects in title that 'first arise after the policy date' only in limited circumstances such as:Escrow & Title
- In Montana, when an appraiser states that their appraisal is an 'as-improved' value 'subject to' specific conditions, this means:Property Valuation
- In Montana, 'conditional zoning' allows a property to be rezoned subject to conditions voluntarily imposed by the developer, such as:Land Use & Zoning
Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
Study This Topic
Practice More Montana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Montana Quiz →