Property Valuation
Functional obsolescence in an appraisal refers to a loss in value due to:
APhysical deterioration of the building's structure
BAn outdated or inadequate design feature within the property✓ Correct
CNegative external factors such as a nearby landfill
DEconomic changes in the real estate market
Explanation
Functional obsolescence is a loss in value from features that are outdated, inadequate, or over-improved relative to current market standards—such as outdated floor plans, inadequate electrical capacity, or having only one bathroom in a 4-bedroom home.
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