Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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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
Varies depending on property location

The correct answer is: 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.