Which distinguishes excess from surplus land in the stated appraisal analysis?
Correct Answer
A) Its capacity to be sold separately or to support an independent use.
Excess land is land not needed for the existing use that can be sold separately or support an independent use, so it is identified and valued separately. Surplus land is also extra land beyond what the existing improvement needs, but it cannot be sold separately and is not valued as a separate site; it may add little or no value. Physical position, an encumbrance or a zoning label alone does not decide which it is.
Why This Is the Correct Answer
Option A is correct because excess land is land not needed for the existing use that can be sold separately or support an independent use, so it is identified and valued separately. Surplus land is also extra land, but it cannot be sold separately and is not valued as a separate site. The capacity to be sold separately or to support an independent use is therefore what distinguishes excess from surplus land.
Why the Other Options Are Wrong
Option B: Its location behind the main building, away from the street frontage.
Option B points to the land's location behind the main building, away from the street frontage. Physical position alone does not decide whether the land can be sold separately or support an independent use.
Option C: Its use for required setbacks, recorded easements and parking areas.
Option C refers to land used for required setbacks, recorded easements and parking areas. Such land typically serves the existing improvement, and an encumbrance alone does not decide whether extra land is excess or surplus.
Option D: A zoning classification that differs from the rest of the parcel.
Option D relies on a zoning classification that differs from the rest of the parcel. The distinction turns on whether the extra land can be sold separately or support an independent use, not on a zoning label by itself.
Excess can exit
Excess land can exit the property: it can be split off and sold or put to its own use. Surplus land stays with the property because it cannot be sold off on its own.
How to use: Use this to tell excess land from surplus land on the exam.
Exam Tip
Ask whether the extra land could be split off and sold or put to its own use; that capacity is what marks it as excess land rather than surplus land.
Common Mistakes to Avoid
- -Classifying land as excess based only on its position on the site
- -Treating surplus land as if it had separate market value
- -Calling extra land excess when it cannot be sold separately or put to an independent use
Concept Deep Dive
Analysis
This question tests the distinction between excess and surplus land. Both are land beyond what the existing improvement needs. Excess land can be sold separately or support an independent use, so it is identified and valued separately; surplus land has no separate market and is not valued as a separate site.
Background Knowledge
A site may contain more land than the existing improvement needs. Excess land can be sold separately or support an independent use, so it is typically identified and valued separately. Surplus land cannot be sold separately and is not valued as a separate site; it may add little or no value.
Real-World Application
A retail building sits on a large parcel with an extra frontage pad that could be split off and sold as its own site. The appraiser identifies the pad as excess land and values it separately. A narrow rear strip with no separate access that cannot be split off and sold is treated as surplus land.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
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