Alabama Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

How does external obsolescence affect property value?

Increases value due to external improvements

Has no effect on property value

Decreases value because it is incurable

External obsolescence refers to factors outside of a property that can negatively impact its value, such as nearby industrial sites, busy highways, or undesirable neighborhood changes. These factors cannot be easily fixed or mitigated by the property owner, thus decreasing the property's value. This makes option C the correct answer.

Option A is incorrect because external obsolescence does not refer to external improvements made by the property owner, but rather external factors that are out of their control.

Option B is also incorrect because external obsolescence does have a significant effect on property value.

Option D is incorrect because while external obsolescence can vary depending on the location of a property, it ultimately has a negative impact on its value regardless.

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Varies depending on property location

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