Plottage (assemblage) value is the increment created when two or more parcels are combined into a larger unit worth more than the sum of the separate parcels, after assemblage costs. Parcel A is worth $320,000 alone and Parcel B is worth $210,000 alone. Combined as one site, market value is $610,000. Direct assemblage costs (legal, demolition of a fence, surveying) total $35,000. What net plottage value results?
Correct Answer
A) $45,000
Separate total = $320,000 + $210,000 = $530,000; gross increment = $610,000 − $530,000 = $80,000; net increment = $80,000 − $35,000 = $45,000. The indicated value is $45,000. This is the result under the stated inputs, not a universal market ratio or an approval of a proposed development. Common errors: not deducting the assemblage costs gives $80,000; deducting the costs from the assembled value instead of from the increment gives $575,000; adding the assemblage costs instead of deducting them gives $115,000.
Why This Is the Correct Answer
Option A is correct because plottage is the increment of value created by assembling parcels, net of assemblage costs here. Separate values total $320,000 + $210,000 = $530,000; the gross increment is $610,000 − $530,000 = $80,000; the net is $80,000 − $35,000 = $45,000.
Why the Other Options Are Wrong
Option B: $80,000
Option B, $80,000, is the gross increment ($610,000 − $530,000) before deducting the $35,000 assemblage costs. The net plottage value is $80,000 − $35,000 = $45,000.
Option C: $115,000
Option C, $115,000, adds the assemblage costs instead of deducting them: $610,000 − $530,000 + $35,000 = $115,000. Costs reduce the increment, giving $45,000.
Option D: $575,000
Option D, $575,000, deducts the costs from the assembled value instead of from the increment: $610,000 − $35,000 = $575,000. That ignores the separate parcel values; the net increment is $45,000.
Whole minus parts minus costs
Net plottage = combined value − sum of separate values − assemblage costs. Assemblage is the act; plottage is the extra value.
How to use: Use this formula on any question that asks for the value gained by combining parcels.
Exam Tip
Keep the terms straight: assemblage is combining parcels, plottage is the value increment from doing so.
Common Mistakes to Avoid
- -Confusing assemblage (the act) with plottage (the value increment)
- -Forgetting to deduct assemblage costs
- -Reporting the combined value as the plottage value
Concept Deep Dive
Analysis
This question tests net plottage value. Compare the combined value with the sum of the separate parcel values to find the gross increment, then deduct the direct assemblage costs. The result is the net increment created by assemblage.
Background Knowledge
Assemblage is the combining of two or more parcels under one ownership; plottage is the increase in value that results when the combined parcel has greater utility than the parts separately. Assembly costs reduce the net benefit of combining parcels.
Real-World Application
An appraiser is asked whether combining two adjacent small commercial lots would support a larger building. She compares the value of the combined site with the two lots separately and deducts legal, survey and minor demolition costs to estimate the net plottage benefit.
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