What are the three types of depreciation recognized in real estate appraisal?
Correct Answer
A) Physical deterioration, functional obsolescence, and external obsolescence
The three types of depreciation in real estate appraisal are: (1) Physical deterioration — wear and tear on the structure; (2) Functional obsolescence — loss in value due to outdated design or features; and (3) External (economic) obsolescence — loss in value caused by factors outside the property, such as neighborhood decline or nearby nuisances.
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