For otherwise comparable lakefront residential lots, verified market evidence shows buyers primarily price usable shoreline frontage. Which listed unit most directly matches that evidence?
Correct Answer
A) Price per front foot of shoreline
Shoreline front-foot pricing matches the stated competitive-market behavior. It still requires analysis of frontage quality, access, view, buildability and other differences. Lakefront status alone does not make area or another unit irrelevant.
Why This Is the Correct Answer
Option A is correct because price per front foot of shoreline directly reflects the stated market behavior; this unit assumes frontage is a primary determinant of value. Differences in frontage quality, access, view and buildability still need analysis.
Why the Other Options Are Wrong
Option B: Price per acre of the total parcel
Option B, price per acre of the total parcel, measures overall land area, not shoreline. When buyers primarily price frontage, two parcels with equal acreage but different shoreline would be misvalued.
Option C: Price per square foot of land area
Option C, price per square foot of land area, again measures area rather than frontage. It does not match evidence that buyers primarily price usable shoreline.
Option D: Price per dwelling unit permitted
Option D, price per dwelling unit permitted, reflects density or buildable units. That fits land priced by development potential, not lots where buyers focus on shoreline frontage.
Price what buyers price
Choose the unit buyers actually pay for; on a lake, that is usually the shoreline.
How to use: Use this when asked which unit of comparison best fits stated market evidence.
Exam Tip
Tie your choice to the market evidence in the facts rather than to a general rule about property type.
Common Mistakes to Avoid
- -Defaulting to price per square foot for every lot
- -Assuming lakefront status alone makes area irrelevant
- -Ignoring frontage quality differences after choosing the unit
Concept Deep Dive
Analysis
This question tests choosing a unit of comparison that matches how buyers actually price land. The facts say buyers primarily price usable shoreline frontage, so the unit should measure frontage.
Background Knowledge
The unit of comparison should be derived from the market and reflect how participants price the property. Common land units include front foot, square foot, acre, site and buildable unit. A unit that does not reflect buyer behavior produces unreliable adjustments.
Real-World Application
An appraiser studies lakefront lot sales and finds prices track shoreline length more closely than lot area. The appraiser analyzes the sales per front foot of shoreline and adjusts for differences in beach quality and slope.
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