PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM GLOSSARY
In appraisal, depreciation is loss in value from any cause.
Valuation and Market Analysis
Valuation foundations
Define, distinguish, apply, retrieve
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PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEBuild the complete exam definition
Learn the rule, separate it from the nearest distractor, then apply it to a Georgia fact pattern.
What does Depreciation mean?
In appraisal, depreciation is loss in value from any cause. It is commonly classified as physical deterioration, functional obsolescence, or external obsolescence.
How do you separate the nearest exam answer?
Appraisal depreciation measures value loss. Accounting or tax depreciation allocates cost under financial or tax rules and is not the same calculation.
What changes or stays the same in Georgia?
The national valuation rule applies in Georgia. Location-based loss from a nearby nuisance is external obsolescence, even though the building itself may be well maintained.
A house loses value because a noisy industrial facility opens next door. The cause is outside the property and is external obsolescence.
Age is not automatically depreciation. A well-maintained older improvement may have limited physical deterioration, while a newer design can have functional obsolescence.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDERetrieve the rule under exam conditions
Answer before reading the explanation. Then explain why every distractor belongs to a different term.
A well-kept 1990s house loses value after a busy truck depot opens across the street. Which type of depreciation is this?
- A
External obsolescence
- B
Functional obsolescence
- C
Physical deterioration
- D
Tax depreciation of the building
Loss in value caused by something outside the property, such as a nearby nuisance, is external obsolescence. Functional obsolescence is a flaw in the building's own design or layout, and physical deterioration is wear and tear, and neither fits a well-kept house hurt by its surroundings.
Mark each box only when you can perform the skill without looking.
I can define the term in one precise sentence.
I can separate it from the closest look-alike.
I can explain the Georgia rule or confirm that the national rule applies.
I can answer the practice check and explain every option.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEConnect the term to the wider exam
Use these relationships to move from isolated recall to a connected exam model.
Valuation and Market Analysis complete lesson
https://www.passgeorgiarealestate.com/study-guide/valuation/principles-of-value
Official exam administration and content-outline source.
https://test-takers.psiexams.com/api/content/bulletin/4672Congressionally authorized source for USPAP and appraisal standards.
https://appraisalfoundation.org/pages/uspap