What is the purpose of a site analysis within an appraisal?
Correct Answer
A) To determine the physical and legal attributes bearing on use
Site analysis identifies relevant physical, legal and economic characteristics affecting use and marketability, including the property rights and restrictions being valued. It does not itself certify a boundary survey or marketable title; material uncertainties require reliable additional information.
Why This Is the Correct Answer
Option A is correct because site analysis determines the physical and legal attributes bearing on use, such as size, shape, topography, drainage, access, zoning and other restrictions. These attributes drive highest and best use and value.
Why the Other Options Are Wrong
Option B: To establish the exact boundaries of the parcel surveyed
Option B says the purpose is to establish the exact surveyed boundaries. That is a surveyor's role; site analysis may rely on a survey but does not itself certify boundaries.
Option C: To calculate the depreciation of the site improvements
Option C says the purpose is to calculate depreciation of site improvements. Depreciation is estimated in the cost approach; site analysis is about characteristics affecting use.
Option D: To confirm the seller holds marketable title to the land
Option D says the purpose is to confirm the seller holds marketable title. Title is confirmed by title professionals or attorneys; the appraiser considers the property rights being valued but does not certify title.
Site analysis serves use
Every item studied in site analysis answers one question: what can this site legally and physically be used for?
How to use: Use this to eliminate answers that describe a surveyor's, title examiner's or cost approach task.
Exam Tip
Distinguish the appraiser's analysis from services performed by surveyors, attorneys and title companies.
Common Mistakes to Avoid
- -Thinking the appraiser certifies boundaries
- -Thinking the appraiser confirms marketable title
- -Confusing site analysis with cost approach depreciation
Concept Deep Dive
Analysis
This question tests the purpose of site analysis. Site analysis identifies the physical, legal and economic characteristics that affect how the site can be used and what it is worth.
Background Knowledge
Important physical characteristics include size, shape, frontage, topography, soil, drainage, orientation and on-site and off-site improvements. Governmental restrictions such as zoning legally constrain use and significantly affect value. Site analysis feeds directly into highest and best use analysis.
Real-World Application
Before valuing a vacant commercial parcel, an appraiser reviews its zoning, frontage, topography, utilities and access. The analysis shows the steep rear portion is not usable, which shapes the highest and best use conclusion.
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?
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