NCh3 The Three Types Of Depreciation In The Cost Approach

Question 1

This type of depreciation in the cost approach is ordinary wear and tear. It is curable. And it has the least impact on the appraisal because all buildings have it like chipped paint, or worn flooring.

Answer 1

Physical deterioration

Question 2

This type of deterioration in the cost approach is brought about by factors in the property, and is often or mostly curable like inferior materials to cut costs, curb appeal, not enough bathrooms or bedrooms or an unpopular four plan or property that likes up updating for modern technology

Answer 2

Functional obsolescence

Question 3

This type of depreciation in the cost approach is a loss of value due to outside factors, also called external obsolescence and is in curable like zoning, air, pollution, noise, traffic jobs, crime rates, etc. and is also called environmental obsolescence

Answer 3

Economic obsolescence