Direct answer
What does External obsolescence mean?
A loss in value caused by influences outside the property.
Exam cue: Look for neighborhood, economic or environmental conditions the owner generally cannot cure on the site.
What does it look like in a question?
New York example
A newly expanded industrial use creates noise next to a residential property.
Common exam trap
What should you not confuse it with?
Deferred maintenance is physical deterioration, not external obsolescence.
Related valuation terms
AppraisalAn opinion of value developed by a qualified appraiser for an identified use, property interest and effective date.CapitalizationThe process of converting income into an indication of value.ComparableA property used as market evidence because it is sufficiently similar to the property being analyzed.Comparative market analysisA broker's analysis of relevant market data to help a seller or buyer consider a probable price range.Cost approachA valuation approach that adds land value to the depreciated cost of the improvements.DepreciationA loss in property value from physical deterioration, functional obsolescence or external obsolescence in appraisal.
Sources used2 references with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
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Put the term back into its full subject.
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