Recent vacant-land sales support a unit price of $42 per square foot for parcels competitive with the subject. The subject site contains 22,500 square feet. Per the unit comparison (sales comparison) application of a market $/sf unit rate to the subject’s size, what land value is indicated?
Correct Answer
C) $945,000
Value = 22500 square feet × $42/square feet = $945,000. The indicated result is $945,000. Common errors: converting to square yards before applying the per-square-foot rate gives $105,000; misplacing the decimal in the area gives $94,500; misplacing the decimal in the rate gives $9,450,000.
Why This Is the Correct Answer
Option C is correct because 22,500 square feet × $42 per square foot = $945,000. Price per square foot is a recognized unit of comparison for vacant land, and the subject area is already in square feet, so no conversion is needed.
Why the Other Options Are Wrong
Option A: $94,500
Option A, $94,500, results from misplacing the decimal in the area, treating it as 2,250 square feet (22,500 × $42 ÷ 10). The correct calculation is 22,500 × $42 = $945,000.
Option B: $105,000
Option B, $105,000, results from converting the area to square yards (22,500 ÷ 9 = 2,500) and then applying the per-square-foot rate ($42 × 2,500). The rate is per square foot, so the area should stay in square feet: 22,500 × $42 = $945,000.
Option D: $9,450,000
Option D, $9,450,000, results from misplacing the decimal in the rate, effectively using $420 per square foot (22,500 × $42 × 10). The correct value is 22,500 × $42 = $945,000.
Match the units
A per-square-foot rate multiplies square feet, and a per-acre rate multiplies acres. If the units match, the multiplication is all you need.
How to use: Use this check before multiplying any unit rate by a subject quantity.
Exam Tip
Estimate the answer roughly first, for example about 20,000 × $40 = $800,000, to quickly eliminate choices off by a factor of 10 or 9.
Common Mistakes to Avoid
- -Converting square feet to square yards before applying a per-square-foot rate
- -Dropping or adding a zero in the area or the rate
- -Applying the rate without confirming the units match
Concept Deep Dive
Analysis
This question tests applying a market-derived price per square foot to the subject site area. Multiply the subject's square footage by the supported unit rate, keeping the units consistent. The distractors reflect unit conversion and decimal errors.
Background Knowledge
Units of comparison for vacant land include price per front foot, per square foot, per acre, per building site, and per unit buildable. The appraiser selects the unit that market participants use and that best explains price differences, then applies the supported rate to the subject's quantity of that unit.
Real-World Application
An appraiser values a vacant commercial pad site and finds several recent pad sales that cluster near $42 per square foot after analysis. The appraiser applies that rate to the subject's 22,500 square feet to reach an indicated land value.
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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Previous Question
Ten finished lots will sell at $120,000 each, five at the end of each of the next two years. Sales costs are 8% of price and developer incentive is 10% of price. At a 14% discount rate, what is the present value of the net proceeds?
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The subject vacant site is encumbered by wetlands and a setback requirement. A comparable vacant site without a wetlands or setback encumbrance sold for $395,000. Paired land sales show a $48,000 discount for these conditions. No other adjustments are needed. What is the indicated land value of the subject?