Property Valuation
Functional obsolescence in real estate appraisal refers to a loss in value due to:
APhysical wear and tear on the structure
BExternal factors such as a nearby highway or industrial use
COutdated design, poor floor plan, inadequate systems, or features that no longer meet current market standards✓ Correct
DOverimprovement of the property relative to the neighborhood
Explanation
Functional obsolescence is a loss in value resulting from deficiencies or superadequacies within the property itself — features that were once standard but are now outdated or don't meet current market expectations. Examples: single-car garage in a market requiring two-car garages, outdated kitchen design, inadequate electrical systems, or inefficient floor plans.
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