Property Valuation
External obsolescence in real estate appraisal results from:
AWorn-out mechanical systems within the building
BFactors outside the property that negatively affect value, such as a new highway adjacent to a residential neighborhood✓ Correct
CAn outdated kitchen design in an otherwise modern home
DOverbuilding within the subject property
Explanation
External obsolescence (also called economic or locational obsolescence) is caused by factors outside the property's boundaries: freeway proximity, nearby industrial uses, declining neighborhood, economic downturns, new competition, or adverse changes in the community. It is generally incurable because the property owner cannot control external factors. It is subtracted from the property's value in the cost approach.
Related Oregon Property Valuation Questions
- What is the 'gross income multiplier' (GIM) as distinct from the 'gross rent multiplier' (GRM)?
- What is a 'as-improved' versus 'as-if-vacant' appraisal analysis?
- In Oregon, an appraiser is valuing an older historic home in Portland's Irvington neighborhood. Which depreciation type would best describe the loss in value from a small bedroom that cannot be enlarged due to the historic designation?
- What is 'plottage value' in Oregon real estate?
- In Oregon, which of the following is NOT typically considered in the sales comparison approach to value?
- An Oregon appraiser using the income approach values a property at $950,000. The property generates $76,000 net operating income annually. What capitalization rate was used?
- A comparable sale in a competitive market analysis (CMA) is typically considered most reliable when it:
- The 'effective age' of a building in appraisal is:
Practice More Oregon Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oregon Quiz →