Which of the following is not an example of external obsolescence for a residential property?

The correct choice highlights that peeling paint is not an example of external obsolescence. Instead, peeling paint is usually classified as an example of physical depreciation, which is a deterioration of the property due to wear and tear or lack of maintenance on the property itself.

External obsolescence involves factors that exist outside of the property and affect its value negatively, typically related to the surrounding environment or community. The presence of a service station next door, increased traffic in the area, and neighbors failing to maintain their properties are all elements that can diminish the desirability or value of a residential property due to external conditions. For instance, a service station might cause noise or create traffic congestion, while poorly maintained neighboring properties can detract from the overall appeal of a neighborhood, impacting the subject property's value.

In contrast, peeling paint is an observable condition specific to the individual home, representing a loss of value due to the property owner's neglect rather than broader external factors influencing the property's marketability. Understanding these distinctions is crucial for real estate professionals when assessing factors that contribute to property valuation.