A lot measures 120 feet by 180 feet. Comparable sites sell at $6.00 per square foot. What value is indicated?
Correct Answer
B) $129,600
Why this is correct: First, calculate the lot area: 120 feet * 180 feet = 21,600 square feet. Then, multiply by the price per square foot: 21,600 * 6.00 = 129,600. The indicated value is $129,600. Why the other choices are wrong: $108,000 results from an incorrect calculation (e.g., 120 * 180 * 5?). $144,000 might come from using perimeter or another miscalculation. $21,600 is the area in square feet, not the value, representing a failure to complete the final multiplication. Exam tip: For area calculations, always write out: length * width = area. Then: area * unit price = total value. Avoid skipping steps.
Why This Is the Correct Answer
One hundred twenty times 180 gives 21,600 square feet, and multiplying by $6.00 gives $129,600. Both steps are required, and stopping after either one produces a wrong answer available among the choices. Verifying in reverse confirms it: $129,600 divided by 21,600 returns $6.00. The rate should be drawn from comparables of similar size, since unit prices vary inversely with parcel size.
Why the Other Options Are Wrong
Option A: $108,000
$108,000 corresponds to 21,600 square feet at $5.00, or to an area of 18,000 at $6.00, neither of which the stem supplies. It is close enough to the correct answer to catch a candidate estimating. Recomputing the area explicitly prevents it.
Option C: $144,000
$144,000 corresponds to 24,000 square feet at $6.00, which would require dimensions the stem does not give. It may arise from a multiplication slip in the area step. Because the error lives upstream in the area, checking that figure first catches it.
Option D: $21,600
$21,600 is the lot area in square feet reported as though it were dollars, which means the candidate stopped after step one. It is the classic incomplete-calculation distractor and the reason area should be labeled with its units when written down. A value of $21,600 for a 21,600-square-foot lot would imply $1.00 per square foot.
Area Times Rate, Both Steps
Two multiplications and a label. Length times width equals area, written with square feet attached. Area times rate equals value, written with a dollar sign. Labeling the units makes the incomplete answer impossible to select.
How to use: Write the area on its own line with units before multiplying by the rate. Then verify by dividing your value back by the area to see whether you recover the stated rate.
Exam Tip
Memorize 43,560 square feet per acre. Land items frequently mix a per-acre rate with dimensions in feet, and the conversion is where points are lost.
Common Mistakes to Avoid
- -Stopping after computing area and reporting it as value
- -Mixing units by applying a per-acre rate to square footage
- -Drawing a unit rate from comparables of substantially different size
Concept Deep Dive
Analysis
Applying a unit price to a site is a two-step operation: compute the area, then multiply by the rate. Here the lot measures 120 by 180 feet, giving 21,600 square feet, and at $6.00 per square foot the indicated value is $129,600. The clean numbers signal that the item tests whether the candidate completes both steps rather than whether they can handle awkward arithmetic. The substantive caution behind the arithmetic is that price per square foot is not constant across parcel sizes; larger lots almost always sell for less per square foot than smaller ones in the same market, because the incremental land beyond what a buyer needs contributes less. An appraiser drawing a $6.00 rate from comparables should therefore confirm those comparables were similar in size to the subject, or adjust for the difference. Other units of comparison, price per front foot for commercial frontage or price per buildable unit for development sites, are sometimes more appropriate depending on what drives value in that market.
Background Knowledge
You need rectangular area computation and the units of comparison used in land valuation, including price per square foot, per acre at 43,560 square feet, per front foot, and per buildable unit. You should also know that unit prices generally decline as parcel size increases, so comparables should be size-similar or adjusted.
Real-World Application
An appraiser valuing a residential lot computes unit prices for seven comparable land sales, notices the two largest sold at lower per-square-foot rates, restricts her rate selection to lots within twenty percent of the subject's size, and explains the size relationship in her land analysis.
More Land/Site Questions
Under which condition is the land residual technique most applicable?
Why can the same physical parcel carry different values in two assignments?
In a built-up area where no vacant land has sold for years, which approach to site value is the usual fallback?
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A land comparable sold 18 months ago in a market rising about 4 percent a year. What adjustment direction applies?
Why does a developer's required profit rise for a longer subdivision project?
How does holding cost enter the valuation of land bought for future development?
Excess land is best described as land that has which characteristic?
Plottage value arises in which of the following situations?
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