Why must the appraiser identify whether a site is served by a private road?
Correct Answer
B) Maintenance liability and access rights differ
Identify lawful access and the actual ownership, easement or other access rights, together with maintenance obligations and costs. Private-road status can affect marketability, but it neither automatically prohibits financing nor eliminates a survey need. Applicable lender requirements must be identified separately.
Why This Is the Correct Answer
Option B is correct because maintenance liability and access rights differ for a site served by a private road. The appraiser identifies lawful access, the ownership or easement rights involved and the maintenance obligations and costs. Access is among the characteristics that can affect value.
Why the Other Options Are Wrong
Option A: Private roads are not permitted in most zoning
Option A claims private roads are not permitted in most zoning. Private roads are common in many developments, and this is not the reason an appraiser identifies them.
Option C: Sites on private roads cannot be financed at all
Option C claims sites on private roads cannot be financed at all. Private-road status can affect lending, but it does not automatically prohibit financing; specific lender requirements are identified separately.
Option D: Private roads make a survey legally unnecessary
Option D claims private roads make a survey legally unnecessary. Road status does not remove the need for a survey where one is warranted.
Who Owns, Who Uses, Who Pays
For a private road, ask who owns it, what rights let the site use it and who pays to maintain it.
How to use: Use these three questions whenever a site relies on a private road.
Exam Tip
Choose answers about rights and obligations. Be cautious of choices claiming private roads automatically bar financing or eliminate other requirements.
Common Mistakes to Avoid
- -Assuming private-road sites cannot be financed
- -Ignoring maintenance obligations when analyzing access
- -Assuming legal access exists without verifying the rights
Concept Deep Dive
Analysis
This question tests why access characteristics matter in site analysis. A private road raises questions about who owns the road, what access rights the site holds and who pays for maintenance. These factors can affect marketability and value, so the appraiser identifies them.
Background Knowledge
Site analysis includes access and road frontage among the characteristics that can affect value. Access may rest on ownership, a recorded easement or another right, and private roads may carry shared maintenance obligations. These issues can influence marketability and financing.
Real-World Application
An appraiser values a home on a private lane shared by several houses. The appraiser checks the recorded access easement and any road maintenance agreement, and considers how buyers in the area react to private-road properties.
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?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
For an as-is valuation of a former gasoline station with known soil contamination, how should the appraiser proceed?
Next Question
A cash-equivalent vacant-site sale of $1,200,000 contains 40,000 SF. Market analysis supports its $/SF rate for an otherwise matched 35,000-SF subject. What value does that rate indicate?