Which of the following best describes observed condition in relation to depreciation?

The best description of observed condition in relation to depreciation is a detailed breakdown of all depreciation components. Observed condition refers to the actual physical and functional state of a property as it relates to its value. This involves a thorough analysis of the various factors contributing to depreciation, including physical deterioration, functional obsolescence, and external obsolescence. By conducting a detailed breakdown, an appraiser is able to accurately assess how these elements affect the overall value of a property.

This comprehensive evaluation is essential in determining the extent of depreciation, which can result from factors such as wear and tear over time, outdated design or features, and external influences impacting the neighborhood or environment. Understanding these components allows appraisers to provide a more accurate valuation, reflecting true market conditions and property performance.