Three parcels assembled under single ownership (standard appraisal guidance assemblage / plottage) support separate as-is values of $240,000, $195,000, and $170,000. After assemblage for a higher-utility use, the combined site is valued at $720,000. Assemblage costs (legal, demolition, holding) total $45,000. What net plottage (assembled value − sum of separate values − assemblage costs) results?
Correct Answer
A) $70,000
Separate values total $605,000. The gross assemblage premium is $720,000 − $605,000 = $115,000. Deduct the stated $45,000 assemblage costs to obtain the requested net increment of $70,000. Gross premium and net benefit must not be conflated.
Why This Is the Correct Answer
Option A is correct because the separate values total $240,000 + $195,000 + $170,000 = $605,000. The gross premium is $720,000 − $605,000 = $115,000, and subtracting $45,000 of assemblage costs gives net plottage of $70,000.
Why the Other Options Are Wrong
Option B: $115,000
Option B, $115,000, is the gross premium: $720,000 − $605,000. The question asks for net plottage after the $45,000 assemblage costs, which is $70,000.
Option C: $605,000
Option C, $605,000, is the sum of the separate as-is values. The net plottage is $720,000 − $605,000 − $45,000 = $70,000.
Option D: $25,000
Option D, $25,000, deducts the assemblage costs twice: $115,000 − $90,000. The $45,000 costs apply once, giving $70,000.
Gross premium minus costs
Find the gross premium first, then subtract the costs of assembling. What remains is the net plottage.
How to use: Use this two-step order whenever a plottage problem includes assemblage costs.
Exam Tip
Read whether the question asks for gross or net plottage. The gross figure is often listed as a distractor.
Common Mistakes to Avoid
- -Reporting the gross premium as net plottage
- -Deducting assemblage costs twice
- -Reporting the sum of separate values
Concept Deep Dive
Analysis
This question tests distinguishing gross plottage from net plottage after assemblage costs. First find the gross premium by subtracting the sum of separate values from the assembled value. Then deduct the assemblage costs once to find the net increment.
Background Knowledge
Plottage is the increment in value from assembling sites into one ownership with greater utility. Assembling parcels often involves legal, demolition and holding costs. Net benefit to an assembler considers those costs, while gross plottage does not.
Real-World Application
A developer assembles three lots for a mid-rise project. The appraiser measures the value gain from assemblage and deducts legal, demolition and holding costs to show the net benefit.
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