An assemblage of two adjoining parcels produced no increase in total value. What does this most likely indicate?
Correct Answer
A) The combined parcel has no plottage value
Why this is correct: Plottage value is the increment in value created by assembling parcels into a larger, more useful site. If the total value equals the sum of the separate parcels, no plottage value exists, indicating the combination did not enable a higher and better use. Why the other choices are wrong: "The appraiser used the wrong unit of comparison" is wrong; the unit of comparison does not explain the lack of value increase. "The parcels should be valued by ground rent" is wrong; ground rent is a valuation method, not an indicator of plottage. "The subdivision method must be applied instead" is wrong; the subdivision method is for raw land development, not assemblage. Exam tip: Plottage value only exists if the assembled parcel supports a more valuable use than the separate parcels.
Why This Is the Correct Answer
Why this is correct: Plottage value is the increment in value created by assembling parcels into a larger, more useful site. If the total value equals the sum of the separate parcels, no plottage value exists, indicating the combination did not enable a higher and better use. Why the other choices are wrong: "The appraiser used the wrong unit of comparison" is wrong; the unit of comparison does not explain the lack of value increase. "The parcels should be valued by ground rent" is wrong; ground rent is a valuation method, not an indicator of plottage. "The subdivision method must be applied instead" is wrong; the subdivision method is for raw land development, not assemblage. Exam tip: Plottage value only exists if the assembled parcel supports a more valuable use than the separate parcels.
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What is the appraiser's obligation when a site's legal description does not match its apparent physical boundaries?
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A property sold for $525,000. Improvements had a replacement cost new of $390,000 with 30 percent accrued depreciation. What land value does extraction indicate?