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)?
Correct Answer
A) $115,000
Separate sum = $290,000 + $340,000 + $250,000 = $880,000; gross increment = $1,050,000 − $880,000 = $170,000; net increment = $170,000 − $55,000 = $115,000. The indicated value is $115,000. This is the result under the stated inputs, not a universal market ratio or an approval of a proposed development. Common errors: not deducting the assemblage costs gives $170,000; deducting the costs from the assembled value instead of from the increment gives $995,000; adding the assemblage costs instead of deducting them gives $225,000.
Why This Is the Correct Answer
Option A is correct because the separate values total $290,000 + $340,000 + $250,000 = $880,000. The gross increment is $1,050,000 − $880,000 = $170,000, and the net increment after $55,000 of assemblage costs is $170,000 − $55,000 = $115,000. Plottage is the added value from combining sites, and the question asks for it net of costs.
Why the Other Options Are Wrong
Option B: $170,000
Option B, $170,000, is the gross increment ($1,050,000 − $880,000) before deducting the $55,000 assemblage costs. The net plottage is $170,000 − $55,000 = $115,000.
Option C: $225,000
Option C, $225,000, adds the assemblage costs instead of deducting them: $1,050,000 − $880,000 + $55,000. Costs reduce the net increment, giving $115,000.
Option D: $995,000
Option D, $995,000, deducts the costs from the assembled value instead of from the increment: $1,050,000 − $55,000. That is not an increment at all; the net plottage is $170,000 − $55,000 = $115,000.
Whole minus parts, minus costs
Plottage is the combined value minus the sum of the separate values. Net plottage then subtracts what it cost to put the parcels together.
How to use: Use this for any assemblage or plottage calculation.
Exam Tip
Note whether the question asks for gross or net plottage, then compute in order: sum, increment, deduct costs.
Common Mistakes to Avoid
- -Confusing assemblage (the act) with plottage (the value increment)
- -Reporting gross plottage when net is asked
- -Subtracting costs from the total value instead of the increment
Concept Deep Dive
Analysis
This question tests calculating net plottage value from an assemblage. Sum the separate as-is values, subtract that sum from the assembled value to find the gross increment, then deduct assemblage costs to get the net increment. Each step must use the right figures.
Background Knowledge
Assemblage is the combining of two or more parcels under one ownership. Plottage is the increment of value that results when assembled sites produce greater utility than they had separately. Costs of assembling the parcels reduce the net benefit of the assemblage.
Real-World Application
A developer buys three adjacent lots to build a mid-rise building that none of the lots could support alone. The appraiser compares the assembled site's value with the sum of the separate lot values and deducts demolition and legal costs to estimate the net plottage.
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?
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?
An appraiser's value indication for a whole property is $2,450,000, and the depreciated contribution of all nonland improvements, including site improvements, is $1,180,000. What land value does the extraction method indicate?
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
The subject is a vacant site near a telecom cell tower. A comparable vacant site without this proximity sold for $550,000. Paired land sales indicate a discount of $83,000 for the proximity stigma, which makes the subject inferior to the comparable. No other adjustments apply. What is the indicated land value of the subject?
Next Question
Stabilized NOI for the subject property is $210,000. The building's replacement cost new less depreciation (RCNLD) is $1,650,000, the building capitalization rate is 8.0%, and the land capitalization rate is 6.5%. Using the land residual technique, what is the indicated land value?