A percolation test fails on a rural site with no public sewer. What should the appraiser do?
Correct Answer
B) Investigate wastewater limits and approvable alternatives
A failed conventional percolation test may constrain or increase the cost of development. Investigate whether an approved alternative wastewater system or other service is feasible under the site conditions and local rules. The test alone establishes neither a specific dollar loss nor that all residential development is impossible.
Why This Is the Correct Answer
Option B is correct because a failed conventional percolation test may constrain development or increase its cost, but it does not by itself settle what is possible. The appraiser investigates whether an approved alternative wastewater system or other service is feasible under the site conditions and local rules, then reflects the findings in the analysis.
Why the Other Options Are Wrong
Option A: Treat residential development as prohibited on the site
Option A treats residential development as prohibited on the site. A failed conventional test alone does not establish that all residential development is impossible, since alternative systems may be approvable.
Option C: Assume a conventional septic system can be installed
Option C assumes a conventional septic system can be installed. The failed test is evidence that a conventional system may not work, so assuming one can be installed ignores a known site problem.
Option D: Deduct the cost of a public sewer system from value
Option D deducts the cost of a public sewer system from value. There is no public sewer, and the test does not establish that a public system is the remedy or set a specific dollar loss.
Failed perc means investigate
A failed perc test is a question mark, not a verdict. Find out what wastewater options are allowed and what they cost.
How to use: Use this when a question presents a site problem whose effect is not yet known.
Exam Tip
When a fact signals a possible problem, the best answer is often to investigate rather than assume the outcome either way.
Common Mistakes to Avoid
- -Assuming the site is unbuildable after one failed test
- -Ignoring the failed test and assuming a conventional septic system
- -Deducting an arbitrary remedy cost without research
Concept Deep Dive
Analysis
This question tests how an appraiser handles a physical site constraint. A failed conventional percolation test raises a question about wastewater disposal, not a final answer. The appraiser investigates the limits and whether approvable alternatives exist before drawing value conclusions.
Background Knowledge
Physical characteristics such as soil, drainage and wastewater capacity affect whether a use is physically possible and financially feasible. When a site problem appears, the appraiser researches its effect rather than assuming the best or worst outcome.
Real-World Application
An appraiser valuing a rural lot learns that a conventional percolation test failed. She contacts the local health department about engineered or alternative wastewater systems, their approval requirements and typical costs, and reflects that information in her highest and best use and value analysis.
More Land/Site Questions
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Vacant land may be valued by a multi-comparable mean unit price ($/acre) applied to the subject’s acreage. Three similar vacant sales: Comp A $840,000 for 8.0 acres; Comp B $1,080,000 for 10.0 acres; Comp C $714,000 for 7.0 acres. Subject is 6.4 acres (no other adjustments). What indicated land value by mean $/acre results?
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A site is leased at a market ground rent of $24,000 per year. The market land capitalization rate is 6%. What land value does ground rent capitalization indicate?