Sales in the market area indicate a value of $4,800 per front foot of street frontage. The subject has 75 front feet. What is the indicated land value?
Correct Answer
C) $360,000
Value = 75 front feet × $4,800/front foot = $360,000. The indicated value is $360,000. This is the result under the stated inputs, not a universal market ratio or an approval of a proposed development. Common errors: misplacing the decimal in the frontage gives $36,000; misplacing the decimal in the rate gives $3,600,000; reporting the unit rate instead of the total gives $4,800.
Why This Is the Correct Answer
Option C is correct because land value equals the unit price times the number of units. The calculation is 75 front feet × $4,800 per front foot = $360,000.
Why the Other Options Are Wrong
Option A: $4,800
Option A, $4,800, reports the unit rate for one front foot instead of the total for 75 front feet. The total is 75 × $4,800 = $360,000.
Option B: $36,000
Option B, $36,000, misplaces the decimal in the frontage, as if it were 7.5 front feet: 75 × $4,800 ÷ 10 = $36,000. The correct result is $360,000.
Option D: $3,600,000
Option D, $3,600,000, misplaces the decimal in the rate, as if it were $48,000 per front foot: 75 × $4,800 × 10 = $3,600,000. The correct result is $360,000.
Feet on the street times rate
Front-foot value = feet of street frontage × price per front foot. Count the street side only.
How to use: Use this when a question gives frontage and a price per front foot.
Exam Tip
Sanity-check the size: 75 feet at roughly $5,000 per foot is about $375,000, which points to $360,000.
Common Mistakes to Avoid
- -Reporting the per-foot rate as total value
- -Using lot depth instead of street frontage
- -Ignoring depth differences when comparing lots by front foot
Concept Deep Dive
Analysis
This question tests applying a front-foot unit of comparison. Multiply the subject's frontage by the supported price per front foot. Watch for distractors showing only the unit rate or a decimal shift.
Background Knowledge
Price per front foot is used where street frontage is a primary determinant of value, such as some retail strips and lakefront lots. Lots of differing depth may need depth adjustments when this unit is used.
Real-World Application
An appraiser values a lakefront lot where buyers price property by shoreline frontage. Sales of similar lakefront lots, analyzed per front foot, support a rate she applies to the subject's measured frontage.
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Five cash-equivalent sales of competitive vacant sites indicate $44, $48, $55, $58, and $62 per square foot. The subject site contains 6,400 square feet. Based on the median price per square foot, what is the indicated land value?