Two contiguous parcels under different ownership are worth $175,000 and $225,000 if used separately. After assemblage under single ownership (standard appraisal guidance assemblage), the combined site supports a market value of $400,000 for the same utility intensity (no higher-utility assembled use is supported). What is the indicated plottage value (incremental value from assemblage)?
Correct Answer
D) $0
Separate total = $175,000 + $225,000 = $400,000; plottage increment = $400,000 − $400,000 = $0. Assembly alone does not create plottage; an increment requires market evidence that the assembled site supports greater utility and value. Common errors: reporting the assembled value instead of the increment gives $400,000; subtracting only the smaller parcel gives $225,000; subtracting only the larger parcel gives $175,000.
Why This Is the Correct Answer
Option D is correct because the separate values total $175,000 + $225,000 = $400,000 and the assembled site is worth $400,000, so the increment is $400,000 − $400,000 = $0. Without greater utility supported by the market, assembly produces no plottage.
Why the Other Options Are Wrong
Option A: $400,000
Option A, $400,000, is wrong because it is the assembled site's total value, not the increment. The increment is $400,000 − ($175,000 + $225,000) = $0.
Option B: $225,000
Option B, $225,000, is wrong because it subtracts only the smaller parcel ($400,000 − $175,000) from the assembled value. Both parcels must be subtracted, giving $400,000 − $400,000 = $0.
Option C: $175,000
Option C, $175,000, is wrong because it subtracts only the larger parcel ($400,000 − $225,000). Subtracting both separate values gives $400,000 − $400,000 = $0.
No extra utility, no plottage
Plottage comes from extra utility; if combining parcels does not let them do more, the whole equals the sum of the parts.
How to use: Use this check before computing plottage to see whether any increment should exist.
Exam Tip
Compare the assembled value with the total of all separate values; if they are equal, the plottage is zero.
Common Mistakes to Avoid
- -Assuming any assemblage creates plottage
- -Reporting the total assembled value as plottage
- -Subtracting only one parcel's value
Concept Deep Dive
Analysis
This question tests whether assembly alone creates plottage. Plottage exists only when the combined site is worth more than the sum of its parts because of greater utility; here the assembled value equals the sum of the separate values.
Background Knowledge
Plottage is an increment of value resulting when sites are assembled under single ownership and produce greater utility. If the assembled site supports only the same use intensity as the separate parcels, there is no increment. Market evidence is needed to support any plottage.
Real-World Application
An owner buys the house lot next door, hoping the combined land will be worth more. The appraiser finds zoning and demand allow only the same single-family use, so the combined value equals the two separate values and no plottage is reported.
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