Which description best defines external obsolescence?

Which description best defines external obsolescence?

• A. Loss in value caused by factors outside the property boundaries.
• B. Loss in value due to internal design flaws.
• C. Physical deterioration from weathering.
• D. Depreciation due to age.

Answer: (C)

External obsolescence is depreciation that comes from factors outside the property’s boundaries. This means things in the surrounding area or market conditions—like a noisy highway, a nearby airport, changing zoning, or an undesirable neighborhood dynamic—that reduce the property's value even if the home itself is in good condition. It’s about external influences, not the condition of the building itself. Weathering describes physical deterioration from the elements, which affects the structure itself and is considered physical depreciation, not external obsolescence. Internal design flaws point to functional obsolescence, where the layout or features inside the building no longer meet current needs. Depreciation due to age is a broad aging effect that can contribute to value loss but isn’t specifically external obsolescence.

External obsolescence is depreciation that comes from factors outside the property’s boundaries. This means things in the surrounding area or market conditions—like a noisy highway, a nearby airport, changing zoning, or an undesirable neighborhood dynamic—that reduce the property's value even if the home itself is in good condition. It’s about external influences, not the condition of the building itself.

Weathering describes physical deterioration from the elements, which affects the structure itself and is considered physical depreciation, not external obsolescence. Internal design flaws point to functional obsolescence, where the layout or features inside the building no longer meet current needs. Depreciation due to age is a broad aging effect that can contribute to value loss but isn’t specifically external obsolescence.