Parcel A is worth $155,000 alone and Parcel B is worth $145,000 alone. Market data indicate that the two parcels, once assembled, would have a combined value of $330,000. What are the assembled land value and the implied plottage for the combined site?
Correct Answer
C) Assembled value $330,000; gross plottage $30,000
The assembled value is $330,000. Separate values sum to $155,000 + $145,000 = $300,000. Gross plottage = $330,000 − $300,000 = $30,000. The increment and total are different quantities.
Why This Is the Correct Answer
Option C is correct because the market-supported value of the combined site is $330,000, the separate values sum to $155,000 + $145,000 = $300,000, and gross plottage is $330,000 − $300,000 = $30,000. The total and the increment are two different quantities.
Why the Other Options Are Wrong
Option A: Assembled value $300,000; gross plottage $30,000
Option A is wrong because an assembled value of $300,000 is just the sum of the separate values ($155,000 + $145,000); the market supports $330,000 for the combined site. The $30,000 plottage figure is right, but the assembled value is not.
Option B: Assembled value $330,000; gross plottage $300,000
Option B is wrong because, although the assembled value of $330,000 is right, gross plottage of $300,000 is the sum of the separate values, not the increment. Plottage is $330,000 − $300,000 = $30,000.
Option D: Assembled value $30,000; gross plottage $330,000
Option D is wrong because it swaps the two figures, listing an assembled value of $30,000 and gross plottage of $330,000. The assembled value is $330,000 and the plottage is $30,000.
Whole versus the extra
Assembled value is the whole combined site; plottage is only the extra above the parts.
How to use: Use this to match each figure to the right label in paired-answer questions.
Exam Tip
When an option pairs two numbers, check each number against its label; one correct number does not make the option correct.
Common Mistakes to Avoid
- -Reporting the sum of separate values as the assembled value
- -Calling the separate-value total the plottage
- -Swapping the assembled value and the increment
Concept Deep Dive
Analysis
This question tests the difference between assembled value and plottage. The assembled value is the market-supported value of the combined site, while gross plottage is the increment above the sum of the separate values.
Background Knowledge
Assemblage is the combining of two or more parcels into one ownership. Plottage is the increment of value that results when the assembled site has greater utility than the parcels separately. Reporting both the total value and the increment helps clarify what the assembly adds.
Real-World Application
A buyer acquires two adjoining lots to build a larger structure. The appraiser reports the combined site's market value and separately shows how much of that value is the plottage increment created by assembly.
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