A commercial site is priced per front foot rather than per square foot because:
Correct Answer
C) Market evidence that frontage-related utility drives competitive prices
A front-foot unit can be informative where verified market behavior shows frontage-related visibility or access drives pricing and other differences are adequately considered. Select units from the actual competitive market; a commercial label alone does not require frontage pricing or establish a depth discount.
Why This Is the Correct Answer
Option C is correct because comparison by sale price per front foot assumes frontage is a primary determinant of value. Where verified market behavior shows frontage-related visibility or access drives competitive prices, a front-foot unit can be informative.
Why the Other Options Are Wrong
Option A: A rule requiring the same unit of comparison for commercial parcels
Option A cites a rule requiring the same unit of comparison for commercial parcels. No such rule controls the choice; the unit is selected from how the actual competitive market prices the property, and a commercial label alone does not require frontage pricing.
Option B: The subject site’s large size compared with the competing sites
Option B points to the subject site's large size compared with competing sites. Size differences call for analysis or adjustment, but they do not by themselves make frontage the unit that drives price.
Option D: The seller’s preferred unit of comparison for the listing
Option D relies on the seller's preferred unit of comparison for the listing. The appraiser selects the unit that reflects market behavior, not a party's preference.
Let the market pick the unit
Choose the unit of comparison buyers actually use to price that property type in that market.
How to use: Use this when a question asks why one unit of comparison was chosen over another.
Exam Tip
Favor answers grounded in market evidence over answers based on rules, labels or a party's preference.
Common Mistakes to Avoid
- -Assuming all commercial sites must be priced per front foot
- -Choosing a unit because the client or seller prefers it
- -Using front-foot pricing without accounting for differing lot depths
Concept Deep Dive
Analysis
This question tests how an appraiser chooses a unit of comparison. The unit should reflect how buyers in the competitive market actually price the property. A front-foot unit is appropriate when market evidence shows frontage drives value.
Background Knowledge
Units of comparison for land include price per front foot, per square foot, per acre, per site and per buildable unit. The best unit is the one that most consistently explains price differences among competitive sales.
Real-World Application
An appraiser valuing a retail pad site on a busy highway finds that competing sales correlate closely with street frontage because visibility and access drive tenant demand. She analyzes the sales per front foot and checks for depth differences.
More Land/Site Questions
How should an appraiser account for a site's access to public sewer compared with competing sites that require septic systems?
Which fact, if supported by competitive-market evidence, most directly supports a unit-price premium for an otherwise comparable site?
A rectangular site's frontage is doubled while its depth is halved, keeping area constant. What is the likely value effect in a retail district?
A downtown site's zoning height limit is reduced from six stories to three. Buyers in this market had been paying for six-story development potential. What effect on land value is most supportable?
A zoning change increases permitted density from four to eight units per acre. What is the likely effect on site value?
Using the allocation method, market evidence supports a typical land-to-total-property-value ratio of 28% for similar improved properties in the subject’s location. An improved comparable sold for $825,000. What land (site) contribution is indicated by applying that ratio?
An appraiser is valuing a vacant site near a landfill. A similar vacant site that is not affected by the landfill sold for $480,000. Paired land sales indicate that proximity to the landfill lowers site prices by $70,000. No other adjustments apply. What is the indicated value of the subject site?
An appraiser is extracting site value from a $600,000 cash sale. The seller's records show an original construction cost of $250,000 and a depreciated book value of $110,000. The appraiser estimates current replacement cost new at $400,000 and accrued depreciation from all causes at $100,000. What is the indicated site value?
Three parcels assembled under single ownership (standard appraisal guidance assemblage) support separate as-is values of $290,000, $340,000, and $250,000. After assemblage for a higher-utility use, the combined site is valued at $1,050,000. Assemblage costs (demolition, legal, holding, and related) total $55,000. What is the indicated net plottage (plottage increment after assemblage costs)?
A comparable commercial site with 65 front feet sold for a cash-equivalent price of $585,000. Per standard appraisal guidance, sale price per front foot is a vacant-land unit of comparison when frontage is a primary value determinant. The subject site has 72 front feet and is otherwise similar. What indicated land value does the front-foot unit support before other adjustments?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
An improved comparable sold for a cash-equivalent $1,100,000. Market allocation evidence supports a typical land-to-total-price ratio of 22% for competitive properties (standard appraisal guidance allocation method). Separately, depreciated cost of the improvements (RCNLD) is estimated at $820,000 (standard appraisal guidance extraction method). Which pairing correctly contrasts the two land-value indications from these facts?
Next Question
Competitive vacant industrial sites support an applicable market rate of $45 per square foot for the subject, after all relevant comparisons. The subject contains 19,000 square feet. What land value does that supported rate indicate?