A verified irregular lot configuration limits efficient placement of a proposed building. What is the most appropriate initial appraisal treatment?
Correct Answer
C) Analyze the site’s utility and value effects
Analyze lot configuration, feasible building placement, cost implications and market reaction as part of site utility. Irregular shape alone is not physical wear and does not justify automatically assigning building functional obsolescence or a fixed loss.
Why This Is the Correct Answer
Option C is correct because an irregular lot configuration is first analyzed as part of site utility. The appraiser studies how the shape affects feasible building placement, any added construction cost and how the market reacts. Only cost or value effects that the evidence supports should be recognized.
Why the Other Options Are Wrong
Option A: Classify land shape as building physical wear
Option A, classifying land shape as building physical wear, misplaces the issue. Physical deterioration is wear and tear on improvements, while lot shape is a characteristic of the site.
Option B: Assume an economic loss without market data
Option B, assuming an economic loss without market data, skips the analysis. An irregular shape does not automatically produce a loss, and any loss must be supported by evidence.
Option D: Apply a fixed external-obsolescence percentage
Option D, applying a fixed external-obsolescence percentage, both misclassifies the issue and uses an unsupported number. External obsolescence comes from influences outside the property, and a lot's own shape is not one of them.
Shape is site, not wear
Lot shape belongs in the site box, so analyze it as site utility. Wear belongs to buildings, and outside forces belong to external obsolescence.
How to use: Use this sorting rule when a question asks how to treat a lot's configuration.
Exam Tip
Be wary of answers that apply a fixed percentage or assume a loss without data. The better answer usually calls for analysis supported by market or cost evidence.
Common Mistakes to Avoid
- -Treating lot shape as physical deterioration of the building
- -Applying a standard obsolescence percentage without market support
- -Assuming any irregular lot is worth less than a regular one
Concept Deep Dive
Analysis
This question tests where an irregular lot configuration belongs in the analysis and what evidence is needed before any adjustment. Lot shape is a site characteristic, so the starting point is site utility: feasible building placement, cost implications and market reaction. Answers that misclassify the issue or apply a loss without support should be rejected.
Background Knowledge
Site analysis considers size, shape, frontage, topography and legal limits to judge how well a site can be used. An awkward configuration may raise development cost or reduce design options, but its value effect has to be measured from the market or from supported cost data. Depreciation categories apply to improvements and should not be used as a shortcut for site characteristics.
Real-World Application
An appraiser values a flag-shaped commercial parcel where the narrow pole limits where a proposed building can sit. He reviews the site plan, notes added paving and design costs, and compares sales of irregular and regular parcels to see whether buyers discounted the shape.
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