Frontage is the primary unit of comparison for the subject site, which has 75 front feet. Market data indicate a unit price of $2,800 per front foot. What is the indicated land value?
Correct Answer
C) $210,000
Value = 75 front feet × $2,800/front feet = $210,000. The indicated result is $210,000. Common errors: misplacing the decimal in the frontage gives $21,000; misplacing the decimal in the rate gives $2,100,000; reporting the unit rate instead of the total gives $2,800.
Why This Is the Correct Answer
Option C is correct because 75 front feet × $2,800 per front foot = $210,000.
Why the Other Options Are Wrong
Option A: $2,800
Option A ($2,800) is just the unit rate for one front foot, not the total value. Multiplying by the 75 front feet gives 75 × $2,800 = $210,000.
Option B: $21,000
Option B ($21,000) results from misplacing the decimal in the frontage: 75 × $2,800 ÷ 10. The correct value is 75 × $2,800 = $210,000.
Option D: $2,100,000
Option D ($2,100,000) results from misplacing the decimal in the rate: 75 × $2,800 × 10. The correct value is 75 × $2,800 = $210,000.
Feet times rate
Front feet multiplied by dollars per front foot gives dollars.
How to use: Use this to set up any front-foot valuation problem.
Exam Tip
Estimate the magnitude first; a total equal to the unit rate or off by a factor of ten signals a slip.
Common Mistakes to Avoid
- -Reporting the unit rate as the total value
- -Misplacing a decimal in the frontage or rate
- -Using front-foot pricing where the market does not price by frontage
Concept Deep Dive
Analysis
This question tests applying a front-foot unit price to the subject's frontage. When the market prices land mainly by frontage, value equals the number of front feet times the supported price per front foot.
Background Knowledge
Price per front foot is one of the standard units of comparison for vacant land and assumes frontage is a primary determinant of value. It is common for lakefront, beachfront and commercial strip sites. Depth and other differences may still need adjustment.
Real-World Application
An appraiser values a commercial lot on a busy street where sales are compared by frontage. With 75 front feet and comparable sales supporting $2,800 per front foot, the land indication is $210,000.
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Previous Question
An appraiser is extracting site value from the $600,000 cash sale of a house with an over-built addition. Replacement cost new less physical deterioration totals $500,000. Paired sales indicate that the over-improvement causes a further $120,000 loss in the value of the improvements. What is the indicated site value?
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The subject is a vacant site near a gas station. A comparable vacant site that is not near a gas station sold for $540,000. Paired land sales indicate a discount of $81,000 for proximity to a gas station. No other adjustments apply. What is the indicated value of the subject site?