Discussion 11: Depreciation Challenges
Unit 11: Depreciation and Value Loss Title: What’s the Hardest Depreciation to Fix?
Instructions: Depreciation can be physical, functional, or external. Let’s discuss its challenges.
In your post, include:
- Which type of depreciation do you think is hardest to fix? Why?
- Share an example of a building where depreciation is obvious or not so obvious?
- Have you had any personal experiences with any types of depreciation.
I worked a foreclosure appraiser for many years.....and there was almost always physical depreciation.
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Side Note:
As an appraiser, I often see deferred maintenance, which happens when homeowners put off repairs—like not painting, ignoring a leaky roof, or letting the carpet wear out. These things add up and can really impact a home’s value.
Deferred maintenance isn’t just cosmetic. It can make financing harder, especially for FHA/VA loans, and even affect insurance coverage. Lenders and buyers notice when a home isn’t well-maintained, and they adjust their offers accordingly.
When I’m out in the field, I look at:
- Cost to cure – How much would it take to get the home back to typical market condition?
- Market impact – Does the home need small fixes, or are we talking major repairs that will scare off buyers?
- Comps in similar condition – I try to compare apples to apples—homes with the same level of upkeep (or lack of it).
It’s always interesting to see how deferred maintenance plays into value. Some owners think their home is worth top dollar, but years of neglect can really take a toll.