A vacant lot sold for $184,000 and measures 80 by 115 feet. Its price per square foot is:
Correct Answer
D) $20.00 per square foot
Why this is correct: First, calculate the lot area: 80 feet * 115 feet = 9,200 square feet. Then, divide the sale price by the area: $184,000 / 9,200 sq ft = $20.00 per square foot. Why the other choices are wrong: "$18.40 per square foot" might come from dividing price by 10,000 (a common mistake). "$16.00 per square foot" could be from using perimeter or incorrect dimensions. "$23.00 per square foot" might come from dividing price by 8,000. Exam tip: Price per unit = Total Price / Total Units (e.g., sq ft, acre). Always verify the area calculation first.
Why This Is the Correct Answer
Eighty times 115 equals 9,200 square feet, and $184,000 divided by 9,200 equals $20.00 per square foot. Verifying in reverse confirms it, since 9,200 times $20.00 returns $184,000 exactly. The two-step order matters because an error in the area computation propagates directly into the unit price. For a residential lot, expressing the result per square foot is conventional, while larger tracts are usually quoted per acre.
Why the Other Options Are Wrong
Option A: $18.40 per square foot
$18.40 results from dividing $184,000 by 10,000 square feet, a rounded area rather than the actual 9,200. Rounding an input rather than the conclusion introduces error at the start of the calculation, and here it understates the unit price by 8 percent. Compute with the actual dimensions and round only the final figure.
Option B: $16.00 per square foot
$16.00 would require an area of 11,500 square feet, which does not follow from the stated dimensions. It may arise from a transposition or from combining the dimensions incorrectly. Checking the area against the two dimensions before dividing catches this immediately.
Option C: $23.00 per square foot
$23.00 corresponds to an area of 8,000 square feet, again not derivable from 80 by 115. The most likely source is multiplying 80 by 100 rather than 115. Writing the multiplication out rather than estimating it prevents the slip.
Area First, Then Divide
Two steps, never merged. Multiply the dimensions and write the area down as its own number. Then divide the price by that number. Most unit-price errors are area errors wearing a disguise.
How to use: Write the area as an intermediate line before touching the price. Then verify by multiplying your unit price back against the area to see whether you recover the original price.
Exam Tip
Memorize 43,560 square feet per acre. Land items routinely mix units, quoting a price per acre and dimensions in feet, and the conversion is where candidates lose points.
Common Mistakes to Avoid
- -Rounding the area before dividing
- -Mixing units by dividing a price by acres and reporting per square foot
- -Comparing unit prices across parcels of very different sizes without adjustment
Concept Deep Dive
Analysis
Price per square foot is a unit of comparison, and computing one requires two steps that must happen in order: establish the area, then divide the price by it. The lot measures 80 feet by 115 feet, so the area is 9,200 square feet. Dividing the $184,000 price by 9,200 square feet gives exactly $20.00 per square foot. The clean result signals that the item is testing whether the candidate computes the area correctly rather than whether they can handle awkward arithmetic. Unit prices matter because they let an appraiser compare parcels of different sizes, but they carry a caution worth remembering: price per square foot usually declines as parcel size increases, since larger parcels command a lower unit price even in the same market. That inverse relationship means unit prices should be compared across similarly sized parcels, or the size difference itself becomes an adjustment.
Background Knowledge
You need to compute rectangular area and to know the common units of comparison in land valuation: price per square foot, per acre at 43,560 square feet, per front foot, per buildable unit, and per unit of density. You should also understand that unit prices generally decline as parcel size increases, so comparables should be similar in size or adjusted for it.
Real-World Application
An appraiser valuing an infill residential lot computes unit prices for six recent lot sales, notices the largest parcels sold at lower per-square-foot prices, restricts her comparables to lots within twenty percent of the subject's size, and adjusts the remaining differences explicitly.
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?
How is entrepreneurial profit treated in the subdivision development method?
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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