In a built-up area where no vacant land has sold for years, which approach to site value is the usual fallback?

Correct Answer

D) Extraction or allocation from improved sales

Why this is correct: In a built-up area with no recent vacant land sales, the usual fallback approaches to site value are extraction or allocation from improved sales. These methods derive land value from sales of improved properties. Extraction subtracts an estimated improvement value from the total sale price. Allocation applies a typical land-to-total-value ratio from the market to the sale price. Why the other choices are wrong: "Direct comparison with vacant sites elsewhere" is unreliable due to significant location differences that are hard to adjust for. "The subdivision development method of analysis" is for raw land being subdivided, not typically for built-up areas. "Capitalizing the ground rent under the lease" only works if the subject is under a ground lease. Exam tip: When vacant comps are absent, look to improved sales and use extraction or allocation.