Three contiguous parcels used separately support market values of $165,000, $210,000, and $155,000. Assembled under single ownership for a higher-utility use (standard appraisal guidance assemblage), the combined site supports a market value of $595,000. Cash assemblage costs (closing, legal, and necessary demolition) total $80,000. What net incremental (plottage) value remains after those assemblage costs?
Correct Answer
A) −$15,000
Separate total = $165,000 + $210,000 + $155,000 = $530,000; gross increment = $595,000 − $530,000 = $65,000; net increment = $65,000 − $80,000 = −$15,000. The indicated result is −$15,000. Common errors: not deducting the assemblage costs gives $65,000; deducting the costs from the assembled value instead of from the increment gives $515,000; adding the assemblage costs instead of deducting them gives $145,000.
Why This Is the Correct Answer
Option A is correct because the separate total is $165,000 + $210,000 + $155,000 = $530,000, the gross increment is $595,000 − $530,000 = $65,000, and the net increment is $65,000 − $80,000 = −$15,000. The assemblage costs exceed the gross plottage increment. A negative result means assembly does not produce a net gain under these figures.
Why the Other Options Are Wrong
Option B: $65,000
Option B, $65,000, is the gross increment ($595,000 − $530,000) before deducting the $80,000 assemblage costs. The net increment is $65,000 − $80,000 = −$15,000.
Option C: $145,000
Option C, $145,000, adds the assemblage costs instead of deducting them ($595,000 − $530,000 + $80,000 = $145,000). The correct net increment is $65,000 − $80,000 = −$15,000.
Option D: $515,000
Option D, $515,000, deducts the costs from the assembled value instead of from the increment ($595,000 − $80,000 = $515,000). The question asks for the net increment, which is $65,000 − $80,000 = −$15,000.
Whole Minus Parts Minus Costs
Plottage is the whole minus the sum of the parts. Subtract the assembly costs to see whether any net gain remains.
How to use: Use this sequence for any assemblage or plottage calculation.
Exam Tip
Follow the steps in order and accept a negative result if the math produces one. A net increment can be negative when costs exceed the gross gain.
Common Mistakes to Avoid
- -Stopping at the gross increment without deducting assemblage costs
- -Subtracting costs from the assembled value instead of the increment
- -Assuming plottage cannot be negative after costs
Concept Deep Dive
Analysis
This question tests plottage and the effect of assemblage costs. First total the separate parcel values, then subtract that total from the assembled value to find the gross increment. Finally subtract the cash assemblage costs from the increment to get the net incremental value.
Background Knowledge
Assemblage is combining two or more parcels under single ownership. Plottage is the increment of value that can result when assembled sites produce greater utility than the parcels separately. Whether assembly is worthwhile depends on comparing that increment to the costs of assembling.
Real-World Application
A developer considers buying three adjoining lots to build a larger project. The appraiser compares the combined site's value with the sum of the separate values, then deducts closing, legal and demolition costs to show the developer whether assembly creates a net gain.
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
A 24-lot residential subdivision tract is being valued as raw land. The finished lots are expected to sell at retail for $95,000 each, a total of $2,280,000. All remaining development costs (infrastructure, holding, marketing, and entrepreneurial incentive) are estimated at $1,050,000; this covers all required nonland costs and incentive without overlap, and timing is not considered. Separately, a recent bulk acreage sale of a comparable unimproved tract indicates $980,000. Which pairing correctly contrasts the subdivision development (developer's residual) indication with the bulk-sale indication?
Next Question
What potential valuation effect should be investigated for a site in a designated flood hazard area?