Parcel A is valued at $175,000 as a separate site and Parcel B at $155,000 as a separate site. Combined under one ownership, the highest and best use of the assembled site gives it a market value of $380,000. What is the plottage value?
Correct Answer
A) $50,000
Separate total = $175,000 + $155,000 = $330,000; gross increment = $380,000 − $330,000 = $50,000. The indicated result is $50,000. Common errors: reporting the assembled value instead of the increment gives $380,000; reporting the sum of the separate values gives $330,000; subtracting only Parcel A gives $205,000.
Why This Is the Correct Answer
Option A is correct because the separate parcels total $175,000 + $155,000 = $330,000, and the assembled site is worth $380,000. The plottage increment is $380,000 - $330,000 = $50,000. That increment reflects the greater utility created by combining the sites.
Why the Other Options Are Wrong
Option B: $205,000
Option B, $205,000, subtracts only Parcel A from the assembled value: $380,000 - $175,000 = $205,000. Both parcels must be subtracted: $380,000 - $330,000 = $50,000.
Option C: $330,000
Option C, $330,000, is the sum of the separate values, $175,000 + $155,000. That is the baseline, not the increment; plottage is $380,000 - $330,000 = $50,000.
Option D: $380,000
Option D, $380,000, reports the assembled site value instead of the increment. Plottage is only the excess over the separate values: $380,000 - $330,000 = $50,000.
Plottage is the plus
Plottage is the extra value that appears when the whole is worth more than the sum of its parts.
How to use: Use this phrase to remember that plottage is the difference, not the total.
Exam Tip
Assemblage is the process and plottage is the resulting increment; answer with the difference between assembled and separate values.
Common Mistakes to Avoid
- -Reporting the assembled value as plottage
- -Subtracting only one parcel's value
- -Confusing assemblage with plottage
Concept Deep Dive
Analysis
This question tests calculation of plottage value from an assemblage. Plottage is the increment in value when parcels combined under one ownership are worth more than the sum of their separate values. The candidate adds the separate values and subtracts that total from the supported assembled value.
Background Knowledge
Plottage is an increment of value that results when two or more sites are assembled under single ownership, producing greater utility. Assemblage is the act of combining the parcels. Plottage exists only when the market supports a combined value greater than the sum of the separate values.
Real-World Application
A developer buys two adjoining small lots that individually support only small buildings. Combined, they can hold a larger mid-rise project, and the appraiser measures the plottage increment by comparing the assembled value with the separate lot values.
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