What is defined as physical deterioration in appraisal?

Physical deterioration in appraisal refers specifically to the decline in a property's condition as a result of wear and tear, aging, or damage that may occur over time. This aspect considers the tangible aspects of a property and how they can diminish its value due to physical factors.

When an appraiser evaluates a property, they assess its condition, including any structural issues, peeling paint, roof wear, or other signs of neglect that contribute to its decrease in value. This concept is crucial because it impacts the overall market value of the property and can lead to significant adjustments during the appraisal process.

The other options address different types of value changes. For example, an increase in property value suggests appreciation, often due to external factors such as market trends, rather than deterioration. External factors themselves can lead to a decrease in value, as mentioned in one of the choices, but they are not classified as physical deterioration. Lastly, inadequate features pertain to functional obsolescence or inefficiencies rather than direct physical degradation or deterioration of existing structures. Thus, recognizing physical deterioration is essential for accurate property valuation based on the current condition of the property.