Property Valuation
What is 'external obsolescence' in real estate appraisal and provide a Nevada example?
APhysical deterioration caused by weather; example: cracked stucco from heat
BA loss in value caused by factors outside the property itself; example: a home near the Las Vegas Strip losing value due to new casino construction blocking views✓ Correct
CLoss in value from outdated features inside the home
DDepreciation caused by the property's age
Explanation
External obsolescence (economic obsolescence) is a loss in value caused by negative external factors the owner cannot control: proximity to a new highway, industrial plant, or flight path. In Nevada, examples include homes near a new industrial facility in Henderson, or properties affected by nearby vacant foreclosures that reduced neighborhood values during the 2008-2012 downturn. External obsolescence is typically incurable.
Related Nevada Property Valuation Questions
- What is functional obsolescence in appraisal terminology?
- A Nevada appraiser is asked to value a single-family home. Which approach is typically given the most weight for this property type?
- What is exposure time in a Nevada real estate appraisal?
- A Nevada property has a replacement cost of $300,000 for improvements and 20% depreciation. If the land is worth $80,000, what is the cost approach value?
- What is a market rent versus contract rent in Nevada property valuation?
- What is a before-and-after appraisal in Nevada condemnation (eminent domain) proceedings?
- A Reno, Nevada commercial property sold for $1,800,000 with a cap rate of 6%. What is the property's annual NOI?
- When would a Nevada appraiser most likely use the cost approach as the primary valuation method?
Practice More Nevada Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nevada Quiz →