A supported feature is overbuilt for the competitive market and its excess cost is not recognized in contributory value. What describes this condition?
Correct Answer
A) Functional superadequacy.
The stated market does not support the feature’s excessive cost relative to its contribution, which identifies superadequacy. Luxury or later addition alone does not establish it. Other design features may contribute value, so measure the unsupported excess rather than automatically deducting every dollar.
Why This Is the Correct Answer
Option A is correct because a superadequacy is a feature whose cost exceeds its contribution to value in the competitive market. Functional obsolescence may be caused by a deficiency or a superadequacy, and here the overbuilt feature with unrecognized excess cost is the superadequacy.
Why the Other Options Are Wrong
Option B: Functional inadequacy.
Option B is wrong because functional inadequacy, or deficiency, describes a feature that falls short of market standards. The stem describes a feature that is overbuilt, which is the opposite condition.
Option C: External obsolescence.
Option C is wrong because external obsolescence is caused by influences outside the property, such as nuisances or market declines. The excess cost here comes from the design of the property itself.
Option D: Physical deterioration.
Option D is wrong because physical deterioration is loss from wear, damage or the elements. Nothing in the stem describes deterioration; the issue is an overbuilt feature.
Super means too much
Superadequacy means too much of a feature for the market, while inadequacy means too little. Both are functional because they come from design.
How to use: Use this contrast to decide between superadequacy and deficiency when a stem describes an over- or under-built feature.
Exam Tip
Look for words like overbuilt or excess cost not recognized by the market; they point to superadequacy rather than to a deficiency.
Common Mistakes to Avoid
- -Calling an overbuilt feature a functional deficiency
- -Treating any luxury feature as a superadequacy without market evidence
- -Deducting the full cost of the feature rather than only the unsupported excess
Concept Deep Dive
Analysis
This question tests the difference between the two kinds of functional obsolescence: deficiency and superadequacy. A feature that costs more than the market will pay for it is an excess, not a shortfall. Because the problem lies in the property's own design, it is functional rather than physical or external.
Background Knowledge
Functional obsolescence is a loss in value caused by the design of the property and may result from a deficiency or a superadequacy. A superadequacy exists when a component's cost exceeds what the market will pay for it. Luxury or a later addition alone does not establish superadequacy; the appraiser measures only the excess that the market does not support.
Real-World Application
An appraiser values a modest suburban home with an elaborate commercial-grade kitchen costing far more than buyers in the area pay for kitchens. Market evidence shows only part of the cost contributes to value, so the unsupported excess is treated as functional obsolescence from a superadequacy.
More Cost Approach Questions
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