.............. but has a 36'x24' outbuilding. Most other comparables within the market area have attached/detached garages for car storage. The subject's outbuilding has a sliding barn door that is not suitable for easy car storage, so I would not be able to substitute it for a garage. I am able to bracket the outbuilding with only one comparable that is located within the market area but outside the village limits.
I've been taught that an item is functionally obsolete when the cost to replace is more than its contributing value. Are there other reasons why an item can be functionally obsolete?
You have multiple issues here, but nothing that cannot easily be solved.
First of all, your outbuilding is smaller than most typical outbuildings. The most common sized outbuilding (pole barn typically) is 30' x 40' followed by 40' x 60'. Your building absolutely could be a substitute for a garage although with functional obsolescence (FO).
As to bracketing, is the house with an outbuilding comparable or are you throwing that in just to bracket for bracketing sake? Bracketing is a nice concept but I rarely worry about it at all.
Your outbuilding isn't functionally OBSOLETE, it has some obsolescence which is a completely different thing. Let use consider that there are degrees of FO. A garage or outbuilding without a pedestrian door is very minor obsolescence. Your building with a sliding door is more obsolescence but that does not make it OBSOLETE.
If you take your subject house, it has FO but is not OBSOLETE. No one is going to build that 1950s house today as it is built so it has some FO but the improvements still contribute to the market. Your barn also contributes but no one would build it the same today thus SOME FO.
FO can also be an over-improvement. Let us say that you have a house on five acres and they have a brand new 60' x 80' pole barn. The market only wants a 30' x 40' or at most 40' x 60'. Because if is bigger and the market does not desire a 4,800 SF barn it has FO as it is too big and maybe too nice. The market is only willing to pay for a 1,200 SF barn and thus you have FO.
Final thoughts on this. If your outbuilding is a pole barn they have a shorter physical life than a typical garage. Did you check to see if it had cement flooring? Almost all outbuildings with OHDs have cement flooring while in my experience there are many outbuildings with barn doors that do not have cement flooring.
Where are you at in Michigan? I am in Monroe and cover Monroe, part of Lenawee and a sliver of Washtenaw. I am a CG with an SRA and do a mixture of residential, farm and commercial.
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