When choosing between sale price per front foot and sale price per square foot as the unit of comparison for vacant land, which approach is correct?
Correct Answer
D) Select units that reflect supported competitive-market pricing
Choose a unit that reflects how buyers compare competitive sites and permits meaningful analysis of differences. Frontage, site area and allowable building area can each be useful in the appropriate market. No commercial or residential label alone establishes one mandatory unit.
Why This Is the Correct Answer
Option D is correct because the unit of comparison should generally reflect the unit used by market participants. Choosing units that reflect supported competitive-market pricing allows meaningful analysis of differences among the sales and the subject.
Why the Other Options Are Wrong
Option A: Select the unit producing the highest value
Option A, selecting the unit producing the highest value, is biased toward a result. The unit should be chosen by market behavior, not by which figure is largest.
Option B: Use front feet for each parcel that has direct access to a public street
Option B uses front feet for each parcel with direct access to a public street. Street access alone does not show that buyers price sites by frontage; many such sites sell by area or buildable units.
Option C: Use square feet only when frontage is unavailable
Option C uses square feet only when frontage is unavailable. That treats frontage as a default, but the unit should follow market pricing, not data availability.
Price it how buyers price it
The best unit of comparison is the one buyers and sellers in that market actually use to compare sites.
How to use: Use this when asked which unit of comparison to choose for land.
Exam Tip
Favor answers that tie the unit to market behavior over answers that set a fixed rule or chase a higher value.
Common Mistakes to Avoid
- -Choosing the unit that produces the highest value
- -Applying frontage pricing just because a site has street access
- -Ignoring the unit market participants actually use
Concept Deep Dive
Analysis
This question tests how to choose a unit of comparison for vacant land. The right unit is the one that reflects how market participants price competing sites. A mechanical rule or a choice based on value outcome does not meet that standard.
Background Knowledge
Common units of comparison for vacant land include price per front foot, per square foot, per acre, per building site and per buildable unit. The appropriate unit depends on how buyers and sellers in the relevant market compare sites.
Real-World Application
An appraiser valuing a downtown retail lot learns that local buyers compare sites by street frontage, while nearby apartment sites trade by allowable units. The appraiser uses front-foot pricing for the retail lot because that matches how the market prices it.
More Land/Site Questions
How should an appraiser account for a site's access to public sewer compared with competing sites that require septic systems?
Which fact, if supported by competitive-market evidence, most directly supports a unit-price premium for an otherwise comparable site?
A rectangular site's frontage is doubled while its depth is halved, keeping area constant. What is the likely value effect in a retail district?
A downtown site's zoning height limit is reduced from six stories to three. Buyers in this market had been paying for six-story development potential. What effect on land value is most supportable?
A zoning change increases permitted density from four to eight units per acre. What is the likely effect on site value?
Using the allocation method, market evidence supports a typical land-to-total-property-value ratio of 28% for similar improved properties in the subject’s location. An improved comparable sold for $825,000. What land (site) contribution is indicated by applying that ratio?
An appraiser is valuing a vacant site near a landfill. A similar vacant site that is not affected by the landfill sold for $480,000. Paired land sales indicate that proximity to the landfill lowers site prices by $70,000. No other adjustments apply. What is the indicated value of the subject site?
An appraiser is extracting site value from a $600,000 cash sale. The seller's records show an original construction cost of $250,000 and a depreciated book value of $110,000. The appraiser estimates current replacement cost new at $400,000 and accrued depreciation from all causes at $100,000. What is the indicated site value?
Three parcels assembled under single ownership (standard appraisal guidance assemblage) support separate as-is values of $290,000, $340,000, and $250,000. After assemblage for a higher-utility use, the combined site is valued at $1,050,000. Assemblage costs (demolition, legal, holding, and related) total $55,000. What is the indicated net plottage (plottage increment after assemblage costs)?
A comparable commercial site with 65 front feet sold for a cash-equivalent price of $585,000. Per standard appraisal guidance, sale price per front foot is a vacant-land unit of comparison when frontage is a primary value determinant. The subject site has 72 front feet and is otherwise similar. What indicated land value does the front-foot unit support before other adjustments?
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Vacant lots in a subdivision sell for about $80,000 while finished homes there sell for about $400,000. Applying that relationship to a subject home that sold for $525,000, what site value does allocation indicate? Assume the stated land ratio is market-supported and applicable to the subject.