Physical Depreciation: What Wear and Tear Costs You
Your home ages every day. Here's how appraisers measure that wear and tear — and what it means for your sale price.
A seller called me last month, frustrated. She'd put her Huachuca City home on the market, felt confident about her price, and then the appraisal came back lower than expected. The appraiser had noted something called "physical depreciation" and docked value for it. She wanted to know: what does that even mean?
Good question. Let me break it down.
What Physical Depreciation Actually Is
Physical depreciation is just a formal way of saying your home is wearing out. Every day a house exists, it ages. The roof loses years off its lifespan. The HVAC works a little harder. The carpet gets more foot traffic. The exterior paint fades in the Southern Arizona sun.
Appraisers account for this aging when they estimate a property's value. They're essentially asking: compared to a brand-new version of this house, how much has time and use taken away?
That's it. No mystery. Wear and tear, measured in dollars.
Two Types Worth Knowing
Appraisers split physical depreciation into two buckets:
Curable depreciation — things that are worn out but can be fixed at a reasonable cost. A dated kitchen, stained carpet, a failing water heater. The logic is: if a buyer can spend $4,000 replacing the carpet and flooring and get that value back, the depreciation is "curable."
Incurable depreciation — things that are too expensive to fix relative to the value they'd add, or things that simply can't be undone. Foundation settling in an older Douglas home. A roof that's 28 years old on a house where a full replacement would cost more than it adds to the price. Structural wear that's just baked into the age of the building.
Both types reduce value. But curable depreciation gives you options as a seller.
A Few Real Examples
Example 1 — The Sierra Vista Rental I listed a rental property a couple years back. The owner had decent tenants, but 12 years of rental use showed. Scuffed walls, worn-down vinyl flooring, an AC unit that was limping along. The appraiser flagged all of it. We ended up pricing accordingly and the seller did fine — but he would have netted more with some targeted repairs beforehand.
Example 2 — The Fort Huachuca Move A military family buying near post was looking at a 1990s-built home. Solid bones, but the original windows were single-pane and the roof had maybe five years left. The appraiser called out both as physical depreciation. We used that report to negotiate the sellers down and had the buyers go in with eyes open about what they'd need to budget.
Example 3 — Desert Sun Damage This one's specific to us down here in Cochise County. UV exposure in Southern Arizona is relentless. I've seen appraisers note exterior paint degradation, cracked caulking, and deteriorating wood trim on homes that look "fine" from the street. Our climate accelerates certain kinds of wear. If you own a home here, that's worth keeping in mind.
The Mistakes I See Sellers Make
- Ignoring deferred maintenance. That slow-dripping faucet, the cracked driveway, the rotting fascia board — sellers think buyers won't notice. Appraisers do.
- Assuming updates cancel out age. A remodeled kitchen helps, but it doesn't make a 40-year-old roof disappear from the appraiser's notes.
- Pricing like the house is new. If you bought a home 20 years ago and haven't touched the major systems, physical depreciation has been quietly accumulating. Your price needs to reflect that reality.
What You Can Do Right Now
If you're thinking about selling in the next six to twelve months, do a honest walk-through of your own home. Look at it like a stranger would. Make a list of everything that's worn, dated, or broken.
Then call me. We'll talk through what's worth fixing before you list and what you should just price around. That conversation — before the appraiser ever shows up — can save you a lot of frustration.
Physical depreciation is real, but it doesn't have to be a surprise.