Florida Real Estate Broker ExaminationValuation and Market AnalysisEasy
A homeowner is selling their property and discovers that a large, high-voltage power line easement runs directly through their backyard, significantly limiting its usable space and aesthetic appeal. This factor would most likely be categorized as:
- APhysical deterioration
- BEconomic obsolescence
- CFunctional obsolescence
- DExternal obsolescence
Show answer & explanationAnswer & explanation
Correct answer: D. External obsolescence
A power line easement is an external factor that negatively impacts the property's desirability and utility, but it is not due to the property's physical condition or design. This makes it a form of external obsolescence.
Why the other options are wrong
- A. Physical deterioration refers to wear and tear or damage to the property itself.
- B. Economic obsolescence is a type of external obsolescence caused by broader economic conditions, which is not the specific issue here.
- C. Functional obsolescence refers to outdated design or features within the property.
External Obsolescence
A loss in property value due to factors outside the property boundaries, often incurable by the owner.
- Caused by negative external influences (e.g., undesirable neighboring land use, environmental issues, power lines).
- Not curable by the property owner.
- Reflects a reduction in utility or desirability from external forces.
Memory trick: Obsolescence: Functional (inside), External (outside).