In April 2026, Maria lists a well-maintained house. Two months later, a six-lane highway opens directly behind the property and increases noise for the entire block. In the cost approach, this loss is best classified as what?
Correct Answer
B) External obsolescence caused by an outside adverse influence
A highway behind the property is an outside influence that reduces desirability without arising from wear to the structure itself. In the cost approach, that is classic external obsolescence, because the source of the loss is outside the property boundary.
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Previous Question
On a June 2026 appraisal, Emma estimates a home's replacement cost new at $320,000 and site value at $90,000. Physical deterioration is $20,000 and functional obsolescence is $10,000, with no external obsolescence. What indicated value does the cost approach produce?
Next Question
During a July 2026 inspection, Appraiser Ben sees a dwelling where one bedroom can be reached only by walking through another bedroom. Which form of depreciation does that design problem most clearly illustrate?