Property Valuation
What is 'functional obsolescence' in real estate appraisal and give a Nevada example?
APhysical deterioration due to weather; example: sun-faded exterior paint in Las Vegas
BA loss in value due to a feature that is outmoded or inadequate for current standards; example: a single-car garage in a Las Vegas neighborhood where buyers expect two-car garages✓ Correct
CA loss in value due to external factors like nearby industrial use
DDepreciation applied only to commercial properties
Explanation
Functional obsolescence is a loss in value caused by features that are outmoded, inadequate, or superfluous by current market standards. In Las Vegas, a common example is a single-car garage when the neighborhood standard is two or three cars, or a home without air conditioning (curable functional obsolescence). It differs from physical deterioration (physical depreciation) and external obsolescence (economic depreciation).
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