When we think of depreciation we usually think of three types of depreciation: physical depreciation, functional obsolescence and the good old external obsolescence, which might even be taken a step further and referred to as local obsolescence or economic obsolescence. If you can make a situation involving depreciation better, then we refer to that quality of depreciation as curable. On the other hand, if nothing can be done about the depreciation, in other words, there ain't nothin' we can do for that place Virginia, we call that incurable depreciation.
What about physical deterioration? Usually this is caused by damage to the house in the form of wear and tear, like peeling, flakey paint, termite infestation and damage to the wood, and bad floors. Two things can be considered here: Is the form of deterioration incurable or curable? If you can make a profit from the cost of fixing the place up we think of this as a curable condition. If the repair doesn't add any value to the home then it's a safe bet that it's incurable, although I'd like to hear from the appraisers on this one.
What about functional obsolescence? This is basically something that has to do with some part of the design of a home that's outlived it's usefulness. A common problem with the design of the home is that the design just simply becomes old and useless as the years pass. Most common example is a 17 bedroom home with one bathroom or an outhouse.
And now, finally, external obsolescence. This is something on the outside of the property that brings the value of the house down, such as a methane gas treatment facility across the street from the house.
Can you think of other types of obsolescense or deterioration that we deal with commonly?
Please be advised that:
The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.
By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.
Before you even think about committing a real estate crime
click this red button.
"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."
© All Rights Reserved.
Department of Justice Legal Policies
Click "HERE" For Today's Question
David Saks Show
University of Memphis
Mr.Saks' participation in ActiveRain ended April 13, 2015.
His blog archives will remain online.
May God bless you.