Which locational change would most likely create external obsolescence for adjacent homes?
Correct Answer
B) Rezoning the street behind for a truck terminal
Why this is correct: External obsolescence is a loss in value due to negative external factors. A truck terminal brings noise, traffic, and pollution, likely depressing nearby residential values. Why the other choices are wrong: "A new elementary school within walking distance" typically increases value due to convenience and desirability. "Fresh sidewalks and street trees" are improvements that usually enhance value. "A neighborhood park replacing a vacant lot" is a positive amenity that typically increases value. Exam tip: External obsolescence often involves nuisances like industrial uses, heavy traffic, or environmental hazards near residential areas.
Why This Is the Correct Answer
Why this is correct: External obsolescence is a loss in value due to negative external factors. A truck terminal brings noise, traffic, and pollution, likely depressing nearby residential values. Why the other choices are wrong: "A new elementary school within walking distance" typically increases value due to convenience and desirability. "Fresh sidewalks and street trees" are improvements that usually enhance value. "A neighborhood park replacing a vacant lot" is a positive amenity that typically increases value. Exam tip: External obsolescence often involves nuisances like industrial uses, heavy traffic, or environmental hazards near residential areas.
More Cost Approach Questions
In a cost approach for a proposed building, the appropriate cost basis is generally:
A warehouse cost $210,000 to build when the cost index stood at 105. The index is now 210. Its indicated current cost is:
The age-life method expresses depreciation as:
Market extraction of depreciation is limited by the fact that it:
Functional obsolescence caused by a deficiency is measured as curable when:
Curable physical deterioration is measured at cost to cure because:
A 2,050 sq ft dwelling is priced at $178 per square foot with a $34,000 detached garage and $21,500 of site improvements. Cost new is:
A house has three bedrooms sharing one bathroom, and adding a second bath is economically justified. This is:
Direct costs in a construction budget include:
An appraiser writes that a 40-year-old house has an effective age of 10 but describes original wiring, original kitchen and a 25-year-old roof. The report's problem is:
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Previous Question
When a site value estimate already reflects an external condition, deducting the full property-level loss from the improvements would:
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Adding a second bathroom to an existing house costs $22,000; the same bathroom in new construction would have cost $14,000. The market pays $25,000 for it. How is the curable deficiency measured?