A house with only one bathroom and four bedrooms suffers from:
Correct Answer
B) Functional obsolescence - inadequacy
Why this is correct: Functional obsolescence due to inadequacy occurs when a property lacks features or capacity expected by the modern market. A four-bedroom house with only one bathroom is a classic example of this deficiency. Why the other choices are wrong: "Physical deterioration" refers to wear and tear, not design flaws. "External obsolescence" is caused by factors outside the property boundaries. "Functional obsolescence - superadequacy" refers to an excess or over-improvement, not a deficiency. Exam tip: Inadequacy = not enough; superadequacy = too much for the market.
Why This Is the Correct Answer
Why this is correct: Functional obsolescence due to inadequacy occurs when a property lacks features or capacity expected by the modern market. A four-bedroom house with only one bathroom is a classic example of this deficiency. Why the other choices are wrong: "Physical deterioration" refers to wear and tear, not design flaws. "External obsolescence" is caused by factors outside the property boundaries. "Functional obsolescence - superadequacy" refers to an excess or over-improvement, not a deficiency. Exam tip: Inadequacy = not enough; superadequacy = too much for the market.
Why the Other Options Are Wrong
The I.S.E. Method
I.S.E. = Internal-Sufficient-External. Internal problems = Functional obsolescence, Sufficient features = check adequacy vs. superadequacy, External problems = External obsolescence. For adequacy: 'IN-adequate' = not enough, 'SUPER-adequate' = too much.
How to use: When you see a property deficiency question, ask: Is it Internal or External? If Internal, is there too little (inadequacy) or too much (superadequacy)? One bathroom for four bedrooms = Internal + too little = Functional obsolescence - inadequacy.
Exam Tip
Look for key ratio relationships in functional obsolescence questions - bathrooms to bedrooms, garage spaces to home size, kitchen size to house size. If the ratio seems insufficient for modern standards, it's functional obsolescence due to inadequacy.
Common Mistakes to Avoid
- -Confusing functional obsolescence with physical deterioration when the issue is design-related, not condition-related
- -Mixing up inadequacy and superadequacy - remember inadequacy means 'not enough' and superadequacy means 'too much'
- -Thinking external obsolescence applies to internal property features rather than outside influences
Concept Deep Dive
Analysis
This question tests understanding of functional obsolescence, specifically the difference between inadequacy and superadequacy. Functional obsolescence occurs when a property's design, layout, or features don't meet current market standards or buyer expectations. Inadequacy refers to insufficient features relative to market expectations, while superadequacy refers to over-improvement beyond what the market values. The bathroom-to-bedroom ratio is a classic example used in appraisal to demonstrate functional obsolescence concepts.
Background Knowledge
Functional obsolescence is divided into two categories: inadequacy (insufficient features for current market standards) and superadequacy (over-improvement beyond market value). Modern market expectations typically require a minimum bathroom-to-bedroom ratio, with four-bedroom homes generally needing at least two full bathrooms.
Real-World Application
In practice, appraisers regularly encounter homes built in earlier eras when bathroom standards were different. A 1950s four-bedroom ranch with one bathroom would require a functional obsolescence adjustment in the cost approach, and comparable sales would need to account for this deficiency when making adjustments.
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