Which describes functional obsolescence?
Correct Answer
C) Supported loss from inadequate or excessive design.
Functional obsolescence is market-supported utility loss from deficiencies or superadequacies in design/features. Wear and outside causes are different categories. A reproduction/replacement cost difference may reflect some functional excess, but is not automatically the complete loss.
Why This Is the Correct Answer
Functional obsolescence is market-supported utility loss from deficiencies or superadequacies in design/features. Wear and outside causes are different categories. A reproduction/replacement cost difference may reflect some functional excess, but is not automatically the complete loss.
More Cost Approach Questions
Which stated cause of supported value loss is external?
Improvement cost new is $450,000. Separately supported improvement depreciation deductions of $45,000, $25,000, $15,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $125,000, already reflecting any site losses. What total indicated value results?
Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
Improvement cost new is $800,000. Separately supported improvement depreciation deductions of $120,000, $80,000, $40,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
The principle of anticipation in real estate valuation states that:
Which highest-and-best-use criterion addresses whether a proposed use is allowed by zoning and applicable legal restrictions?
Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
When reconciling value indications from the three approaches to value, an appraiser should:
A property sold at a cash-equivalent price of $1,062,500. Its stabilized annual NOI is $85,000. What is the indicated overall rate?
In reconciliation, an appraiser should:
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A comparable is superior in condition. Market evidence—not the repair invoice alone—isolates a $7,500 condition penalty for the subject’s deficiencies. What signed condition adjustment applies to the comparable toward the subject?
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A comparable cash price is $295,000. Its superior location requires a supported downward adjustment expressly equal to 6% of that COMPARABLE price. What adjusted price results? This is not a statement that its price equals 106% of a lower subject-location price.