Which event would RAISE a building's effective age relative to last year's estimate?
Correct Answer
B) Years of skipped maintenance now visible throughout
Visible sustained neglect can increase supported effective age by reducing condition and utility relative to market norms. Replacing components may reduce effective aging, but no cosmetic change or designation prescribes a fixed effective-age movement. Use actual condition evidence rather than a mechanical calendar rule.
Why This Is the Correct Answer
Option B is correct because effective age reflects the stage of an improvement's economic life as shown by its actual condition and utility. Years of skipped maintenance now visible throughout reduce condition relative to market norms, which supports a higher effective age. The increase must still be supported by observed condition evidence.
Why the Other Options Are Wrong
Option A: A roof and window replacement
Option A, a roof and window replacement, improves the building's condition. Replacing major components tends to lower effective age, not raise it.
Option C: Repainting in fashionable colors
Option C, repainting in fashionable colors, is a cosmetic improvement. It does not worsen condition or utility, so it gives no reason to raise effective age.
Option D: A well-publicized neighborhood historic designation
Option D, a well-publicized neighborhood historic designation, is an outside influence that does not change the building's physical condition or utility. It does not by itself prescribe any change in effective age.
Neglect ages, updates rejuvenate
Neglect makes a building effectively older; updates make it effectively younger. Paint colors and labels do not change the age the building shows.
How to use: Use this to predict the direction of an effective-age change from a described event.
Exam Tip
Note whether the question asks what raises or lowers effective age, and match the event to the direction of its effect on condition.
Common Mistakes to Avoid
- -Thinking component replacements raise effective age
- -Treating cosmetic updates as changing effective age by a set amount
- -Assuming outside designations change the building's condition
Concept Deep Dive
Analysis
This question tests what changes effective age. Effective age reflects actual condition and utility on the valuation date, so events that worsen condition can raise it and events that improve condition can lower it. Sustained neglect that is now visible throughout is the event that would increase it.
Background Knowledge
Effective age can be higher or lower than actual age depending on maintenance, updates and utility. Deferred maintenance accelerates effective aging, while component replacements can reduce it. Appraisers base effective age on observed condition rather than a calendar rule.
Real-World Application
On a reinspection a year after a prior appraisal, an appraiser finds water stains, failing caulk, worn flooring and a neglected yard throughout the house. The appraiser raises the effective age estimate to reflect the poorer condition.
More Cost Approach Questions
Why can equivalent-utility replacement cost be useful for an obsolete improvement?
An appraiser estimates the current replacement cost new of the improvements at $890,000, accrued depreciation from all causes at $170,000, and land value at $325,000. All necessary cost components and depreciation are included in those amounts. What is the indicated property value?
Improvement cost new is $595,000. Separately supported improvement depreciation deductions of $48,000, $27,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $155,000, already reflecting any site losses. What total indicated value results?
What best supports a claimed loss from a bathroom-layout deficiency?
Improvement cost new is $1,850,000. Separately supported improvement depreciation deductions of $310,000, $620,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
Which scenario most strongly supports giving the cost approach substantial weight?
A cost total $650,000 explicitly includes $40,000 of non-realty FF&E outside the appraised real-property interest. Exclude it. Supported realty-only total depreciation is $55,000. Add site $200,000, with no overlap. What real-property cost indication results?
A 2,200-sf dwelling costs $200 per square foot, and a separate 400-sf garage costs $75 per square foot. These costs are complete and do not overlap. Both have an effective age of 15 years and a total life of 50 years, with straight-line depreciation and no salvage value. No site value or other loss is involved. What is the combined depreciated cost of the dwelling and garage?
A new feature in the improvements has a current cost of $45,000 and a market contribution of $18,000. The entire difference is due to superadequacy, with no physical or external loss and no overlap. What is the loss from the superadequacy?
An external influence causes an annual net income loss of $9,600. The capitalization rate for the loss is 8%, and no other economic factors change. What is the indicated loss in value of the whole property, before allocation between site and improvements?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Income Approach
8.2% of exam
Previous Question
An improvement has total depreciation of $75,000 and an effective age of 15 years. If the loss is spread in equal annual amounts, what is the average depreciation per effective year?
Next Question
An appraiser measures external obsolescence as a percentage of improvement cost remaining after physical and functional deductions. Why is that percentage applied after those deductions?