Property Valuation
External obsolescence (economic obsolescence) in an appraisal is caused by:
AOutdated kitchen fixtures in the subject property
BFactors outside the property, such as a nearby landfill, high crime, or economic decline✓ Correct
CPhysical deterioration of the roof
DPoor floor plan design by the original builder
Explanation
External obsolescence is a value loss caused by factors outside the property boundaries — such as proximity to a landfill, flight paths, economic decline, or zoning changes. It is typically incurable.
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- External (economic) obsolescence is a form of depreciation caused by:Property Valuation
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- A Nebraska appraiser identifies an external obsolescence affecting a residential property near a newly constructed highway. External obsolescence is:Property Valuation
- A Nebraska appraiser is asked to determine a property's 'insurable value' for insurance purposes. This is closest to which appraisal concept?Property Valuation
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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