A 2,400 square foot house has only one bathroom and no dining room. For a typical family, this represents:
Correct Answer
B) Functional obsolescence due to deficiency
This represents functional obsolescence due to deficiency because the house lacks adequate bathrooms and dining space that would be expected in a home of this size by current market standards.
Why This Is the Correct Answer
Option B is correct because this scenario represents functional obsolescence due to deficiency. The house lacks adequate bathrooms and dining space that would be expected by today's market standards for a 2,400 square foot home. Modern families expect multiple bathrooms and designated dining areas in larger homes, making this a clear case of the property being deficient compared to current market expectations. This deficiency would negatively impact the property's value and marketability.
Why the Other Options Are Wrong
Option A: Adequate functional utility
Option A is incorrect because one bathroom and no dining room in a 2,400 square foot house does not provide adequate functional utility for a typical modern family. Current market standards and buyer expectations for a home of this size would include multiple bathrooms and a dining area.
Option C: Physical deterioration
Option C is incorrect because physical deterioration refers to the actual wear and tear or decay of building components due to age, use, or weather. The lack of bathrooms and dining room is not about physical condition but rather about the adequacy of the floor plan and room count for current market standards.
Option D: External obsolescence
Option D is incorrect because external obsolescence refers to negative influences from outside the property boundaries, such as nearby industrial facilities, traffic, or neighborhood decline. The bathroom and dining room deficiency is an internal characteristic of the property itself, not an external factor.
FIDO - Functional Inside, Deficient Outside
Remember FIDO: Functional obsolescence is about what's INSIDE the property (layout, features, room count) being Deficient compared to current market standards, while External obsolescence comes from OUTSIDE influences
How to use: When you see a question about missing or inadequate interior features compared to market expectations, think FIDO - it's functional obsolescence due to deficiency, not external factors or physical deterioration
Exam Tip
Always consider current market standards for the property size and type when evaluating functional obsolescence - what would today's typical buyer expect in a home of this square footage?
Common Mistakes to Avoid
- -Confusing functional obsolescence with physical deterioration
- -Not considering current market standards when evaluating adequacy
- -Mixing up deficiency vs superadequacy types of functional obsolescence
Concept Deep Dive
Analysis
This question tests understanding of functional obsolescence, specifically the difference between deficiency and superadequacy. Functional obsolescence occurs when a property lacks features that current market standards expect (deficiency) or has features that exceed market expectations in a cost-ineffective way (superadequacy). A 2,400 square foot house with only one bathroom and no dining room fails to meet modern family expectations for a home of this size. Current market standards would typically expect at least 2-3 bathrooms and a designated dining area in a house of this square footage.
Background Knowledge
Functional obsolescence is divided into two categories: deficiency (lacking features expected by current market standards) and superadequacy (having features that exceed market expectations in a cost-ineffective way). Appraisers must understand current market expectations for different property sizes and types to identify functional obsolescence.
Real-World Application
In practice, appraisers regularly encounter older homes that were adequate when built but now lack features expected by current buyers, such as master bathrooms, adequate closet space, or open floor plans, requiring adjustments in the sales comparison approach
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