Why might two lots of identical area sell for different amounts on the same street?
Correct Answer
B) Shape, frontage and topography differ between them
Equal area does not imply equal utility or value. Shape, frontage, slope, access, restrictions, service and timing may differ, and market evidence determines their effects. Different sale prices do not by themselves establish a recording error or a specific required adjustment.
Why This Is the Correct Answer
Option B is correct because physical characteristics such as shape, frontage and topography affect how a lot can be used and therefore its value. Equal area does not mean equal utility. These differences can explain why two same-size lots on one street sell for different prices.
Why the Other Options Are Wrong
Option A: One lot was assessed at a higher value than the other
Option A points to one lot being assessed higher. An assessed value is a tax figure and does not by itself cause a buyer to pay more; market prices respond to the property's actual characteristics.
Option C: Identical lots sell for identical prices on one street
Option C claims identical lots sell for identical prices on one street. Lots of equal area are not necessarily identical, and even similar lots can sell for different prices because of physical differences, timing and terms.
Option D: The later sale must have been improperly recorded
Option D says the later sale must have been improperly recorded. A difference in price does not by itself indicate a recording error; real differences between the lots are a more plausible explanation.
Same size, different utility
Area is only one trait; shape, frontage and slope decide how much of that area is useful.
How to use: Use this when a question asks why similar-sized sites have different values.
Exam Tip
When two properties share one trait but sell differently, look for the answer that names other physical or market differences.
Common Mistakes to Avoid
- -Treating lots of equal area as equal in value
- -Using assessed value to explain market price differences
- -Assuming a price difference signals an error in the record
Concept Deep Dive
Analysis
This question tests the idea that land size alone does not determine value. Two lots with the same area can differ in shape, frontage, topography and other physical characteristics that affect utility. Market evidence determines how much each difference matters.
Background Knowledge
Important physical characteristics of a site include size, shape, frontage, topography, soil, drainage, orientation, access and utilities. Each can influence highest and best use and value. Appraisers describe these features and use market data to measure their effect.
Real-World Application
Two quarter-acre lots on the same street sell months apart at quite different prices. The appraiser notes one is rectangular with wide frontage and level ground, while the other is a narrow, steep pie-shaped lot that would cost more to build on.
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?
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Previous Question
Two adjoining lots are worth $150,000 and $170,000 separately. Assembled, the site is worth $400,000, and assembly requires $20,000 of legal and demolition costs. What net plottage increment does the assemblage create?
Next Question
Parcel A is worth $280,000 and Parcel B is worth $195,000 as separate units, a total of $475,000. Assembled under one ownership for their highest and best use, the combined site is worth $530,000. Before any costs of assembling the parcels, what is the gross plottage?