Two contiguous parcels under different ownership are worth $240,000 and $160,000 if used separately. Assembled under single ownership for a higher-utility use, the combined site supports a market value of $475,000. What is the indicated plottage value?
Correct Answer
A) $75,000
Separate total = $240,000 + $160,000 = $400,000; gross increment = $475,000 − $400,000 = $75,000. The indicated result is $75,000. Common errors: reporting the assembled value instead of the increment gives $475,000; reporting the sum of the separate values gives $400,000; subtracting only the first parcel gives $235,000.
Why This Is the Correct Answer
Option A is correct because the separate values total $240,000 + $160,000 = $400,000, and the assembled value of $475,000 exceeds that by $475,000 − $400,000 = $75,000. That increment is the plottage value.
Why the Other Options Are Wrong
Option B: $235,000
Option B, $235,000, subtracts only the first parcel: $475,000 − $240,000 = $235,000. Both parcels must be subtracted: $475,000 − $400,000 = $75,000.
Option C: $400,000
Option C, $400,000, is the sum of the separate values, $240,000 + $160,000. Plottage is the increment above that sum, $75,000.
Option D: $475,000
Option D, $475,000, is the assembled value, not the increment. Plottage is $475,000 − $400,000 = $75,000.
Whole minus parts equals plottage
Assemblage is the process; plottage is the extra value the combined whole has over its parts.
How to use: Use this to separate the act of assembling from the value it creates.
Exam Tip
Plottage is an increment, so the answer is a difference, not a total.
Common Mistakes to Avoid
- -Reporting the assembled value as plottage
- -Reporting the sum of separate values
- -Confusing assemblage with plottage
Concept Deep Dive
Analysis
This question tests the definition and measurement of plottage. Plottage is the increment of value created when sites are assembled under single ownership for greater utility. It equals the assembled value minus the sum of the separate values.
Background Knowledge
Assemblage is the act of combining parcels, and plottage is the increment of value that can result when the combined site has greater utility. Plottage exists only when the assembled site is worth more than the parts. Assembly costs and market support should be considered when analyzing it.
Real-World Application
A developer buys two small adjoining lots to build a larger project that neither lot could support alone. The appraiser finds the combined site worth more than the two lots valued separately and reports the difference as plottage.
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