Sale price per acre is one of the vacant-land units of comparison. A comparable vacant tract of 8.0 acres sold for a cash-equivalent price of $960,000 and is otherwise similar to the subject in HBU and market conditions. What indicated unit price per acre should be applied before any remaining elements-of-comparison adjustments?
Correct Answer
C) 120,000 dollars per acre
Divide $960,000 by the comparable’s 8.0 acres to obtain $120,000 per acre. Multiplying that unit rate by 8.0 acres recovers the sale price. This is a unitization step, not a conclusion that all parcels command an identical per-acre rate.
Why This Is the Correct Answer
Option C is correct because the unit price per acre equals price divided by acres: $960,000 ÷ 8.0 acres = $120,000 per acre. Multiplying back, $120,000 × 8.0 = $960,000 confirms the result.
Why the Other Options Are Wrong
Option A: 96,000 dollars per acre
Option A, 96,000 dollars per acre, divides by 10 instead of the actual 8.0 acres: $960,000 ÷ 10. The correct rate is $960,000 ÷ 8.0 = $120,000 per acre.
Option B: 960,000 dollars per acre
Option B, 960,000 dollars per acre, treats the total sale price as if it were the per-acre rate. Dividing by 8.0 acres gives $120,000 per acre.
Option D: 7,680,000 dollars per acre
Option D, 7,680,000 dollars per acre, multiplies the price by the acreage: $960,000 × 8.0. A unit price requires division, giving $120,000 per acre.
Per means divide
Any price per unit is the total price divided by the number of units. Per acre means divide by acres.
How to use: Use this rule whenever a question asks for a price per unit.
Exam Tip
Check by multiplying your unit rate by the acreage; it should return the sale price.
Common Mistakes to Avoid
- -Multiplying instead of dividing
- -Using the wrong acreage
- -Assuming all tracts sell at the same per-acre rate
Concept Deep Dive
Analysis
This question tests unitizing a comparable land sale into a price per acre. Divide the sale price by the number of acres. The resulting rate is then adjusted for remaining differences before application to the subject.
Background Knowledge
Unitizing sale prices allows comparison of parcels of different sizes. Price per acre is common for larger tracts. Size differences may still require adjustment because unit prices often vary with parcel size.
Real-World Application
An appraiser valuing a rural homesite tract collects several acreage sales of different sizes. She converts each to price per acre before adjusting for location, access and size.
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?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
Sales of comparable vacant sites indicate a consistent price of $35 per square foot. The subject vacant site contains 12,000 square feet. What is the indicated land value?
Next Question
An appraiser is valuing a vacant site near a wind farm. A comparable vacant site that is not near wind turbines sold for $575,000. Paired land sales indicate a $90,000 discount for wind farm proximity. No other adjustments apply. What is the indicated value of the subject site?