Land and Site Valuation

Question 1

1 of 51 Which of the following improvements is considered an onsite improvement?

Answer 1

Utility hookups

Question 2

2 of 51While appraising two adjacent properties to be refinanced, the appraiser realizes that the same party owns both parcels. The appraiser understands that the total value may be greater if the two adjacent parcels were joined to make one large parcel, rather than appraising them individually and adding the separate values together. What concept is the appraiser considering?

Answer 2

Plottage

Question 3

3 of 51Contiguous

Answer 3

Connected to or touching along an unbroken boundary.

Question 4

4 of 51Steve is using the cost approach and does not have access to any good vacant land sales. What is it called if Steve simply uses comparable improved properties and establishes a ratio of their original land value to their present value?

Answer 4

Extraction method

Question 5

5 of 51Which of the following may be used to privately control the use of land?

Answer 5

Deed restrictions

Question 6

6 of 51Why should an appraiser consider the shape of the subject property and the sale of each comparable?

Answer 6

An irregular-shaped lot could have less value since it is more difficult to develop and use.

Question 7

7 of 51Subdivision

Answer 7

A tract of land that has been divided into lots or blocks with streets, roadways, open areas, and other facilities appropriate to its development as residential, commercial, or industrial sites. A residential development that is created from a piece of land which has been subdivided into individual lots.

Question 8

8 of 51Buffer Zone

Answer 8

A segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas.

Question 9

9 of 51Which technique for determining land value requires an appraiser to deduct the net income applicable to the building from the total net income, and then capitalize the remainder and attribute the result to the land?

Answer 9

Land residual

Question 10

10 of 51Scott is appraising some vacant land with development potential. Scott found some comparables of land in the subject’s market: Lot 89 = 30,000 square feet sold for $489,000; Lot 21 = 12,000 square feet sold for $177,000; and Lot 821 = 41,000 square feet sold for $986,000; and Lot 217 = 20,100 square feet sold for $326,700. Which comparable has the highest dollar per square foot value?

Answer 10

Lot 821

Question 11

11 of 51The subject site is described: Beginning at a point 500 feet east of the northwest corner of Section 23, Township 23NR5E of the Third Principal Meridian, then: 200 feet north; 100 feet east; and southwesterly back to the point of beginning. What is the shape? What is the area?

Answer 11

Triangular; .23 acres

Question 12

12 of 51Extraction

Answer 12

1. A method of estimating value in which the depreciated cost of the improvements on the improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land. 2. A method of deriving capitalization rates from property sales when the sale price and net operating income are known.

Question 13

13 of 51What is the process to determine land residual?

Answer 13

Net operating income attributable to the land is capitalized at market rates to obtain land value.

Question 14

14 of 51Excess Land

Answer 14

Land that is not needed to serve or support the existing improvement. Highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land may have the potential to be sold separately and is valued separately. See also surplus land.

Question 15

15 of 51The subject site is 25’ x 125’, rectangular, flat topography, zoned residential. The site is currently unimprove Similar lots in the neighborhood sell for $50,000. The site is adjacent to a landfill that is cappe The poor location reduces site value 25%. What is the external obsolescence indicated for the subject site?

Answer 15

0

Question 16

16 of 51When land value is estimated by deducting the depreciated cost of improvements on a property from the total sale price of the property, this is known as

Answer 16

extraction.

Question 17

17 of 51Site Improvements

Answer 17

Improvements on and off the site that make it suitable for its intended use or development. On-site improvements include grading, landscaping, paving, and utility hookups; off-site improvements include streets, curbs, sidewalks, drains, and connecting utility lines.

Question 18

18 of 51Conservation Easement

Answer 18

An interest in real property restricting future land-use to preservation, conservation, wildlife habitat, or some combination of those uses. A conservation easement may permit farming, timber harvesting, or other uses of a world nature to continue, subject to the easement. In some locations a conservation easement may be referred to as a conservation restriction. As differentiated from a preservation easement.

Question 19

19 of 51Frontage

Answer 19

The segment of a property that runs along a point of access, such as a street or waterfront.

Question 20

20 of 51When developing an opinion of site value of an improved property, an appraiser must value the site as if it is:

Answer 20

vacant and available for development to its highest and best use.

Question 21

21 of 51The subject site is a 50’ x 200’ flat, rectangular parcel zoned Ag-1 (Agriculture). The site is improved with a 1,500 sf, 1.5-story farmhouse. The cost to demolish the house is estimated at $15/sf. The cost to renovate the house is estimated to be $75/sf. The land value is currently $75,000. The value of the property “as-is” is $200,000. The value “after repairs” is $250,000. The subject property is a legal use of a conforming site. What is the highest and best use of the subject property as improved?

Answer 21

as currently improved

Question 22

22 of 51The land residual method of site valuation makes use of two components of value of an improved property. What are they?

Answer 22

Site and improvements

Question 23

23 of 51Right of Way

Answer 23

A right to pass over land in some particular path; a strip of land used for transportation such as streets and roads, railways, utility lines, and for other private or public transportation uses.

Question 24

24 of 51Which of the following is not one of the six recognized methods for land and site valuation?

Answer 24

Building residual

Question 25

25 of 51Land Use

Answer 25

1. The employment of a site or holding to produce revenue or other benefits. 2. The designation by a governing authority of the use to which land may be put to promote the most advantageous development of the community, e.g. designation of industrial, residential, commercial, and recreational, and other uses under a master plan.

Question 26

26 of 51Half-Section

Answer 26

320 acres

Question 27

27 of 51To determine whether the best course of action with a property is to leave it as it is or demolish it and rebuild, an appraiser must identify

Answer 27

the property’s highest and best use.

Question 28

28 of 51Encroachment

Answer 28

1. Trespassing on the domain of another. A building or other improvement on one property which invades another property or restricts its usage. 2. Partial or gradual displacement of an existing use by another use, e.g., locating commercial or industrial improvements in residential district.

Question 29

29 of 51Samantha, a certified residential appraiser, receives an assignment to appraise a brick ranch on an urban lot in Anytown. Samantha has appraised several houses in the subject neighborhood over her 15-year career as an appraiser. This particular house is on the periphery of the neighborhood, and fronts a busy commercial thoroughfare. The zoning is Commercial (C-3), which allows for restaurants. Samantha searches for improved sales on the same busy street and finds three. All of them sold for more than she expecte Driving the comparables, she discovered that one was now improved with a restaurant; and the other two were vacant lots. There are several house sales in the interior of the neighborhood, with no tear-downs evident. What is the most probable highest and best use of the subject site?

Answer 29

Commercial

Question 30

30 of 51Which of the following defines plottage value?

Answer 30

The incremental value created by combining two or more sites to create greater utility

Question 31

31 of 51Underimproved Land

Answer 31

A piece of land which has been improved, but not to the full extent of its potential.

Question 32

32 of 51Abstraction Method

Answer 32

This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.

Question 33

33 of 51Which of the following is the best definition of surplus land?

Answer 33

Land that does not support the existing improvements and cannot be separately sold

Question 34

34 of 51Which method of valuing the land component of a property subtracts the depreciated cost of improvements from the total sale price of an improved property?

Answer 34

Extraction

Question 35

35 of 51Plottage

Answer 35

The incremental value created when two or more sites are combined to produce greater utility. See also assemblage.

Question 36

36 of 51The original cost of the improvements on a property was $350,000. The depreciated cost of the improvements is $250,000. The sale price of the property is $400,000. What is the value of the land by the extraction technique?

Answer 36

$150,000

Question 37

37 of 51Subdivision Development Method (Subdivision Analysis)

Answer 37

A method of estimating land value when subdivision development is the highest and best use of the parcel of land being appraised. When all direct and indirect costs and entrepreneurial incentive are deducted from an estimate of the anticipated gross sale price of the finished lots (or residences), the resultant net sales proceeds are then discounted to present value at a market derived rate over the development and absorption period to indicate the value of the land.

Question 38

38 of 51The term assemblage refers to:

Answer 38

combining two or more adjacent land units into one use.

Question 39

combining two or more adjacent land units into one use.

39 of 51Acre

Answer 39

43,560 square feet. A measurement of area.

Question 40

40 of 51Raw Land

Answer 40

Land on which no improvements have been made; land in its natural state before grading, construction, subdivision, or the installation of utilities.

Question 41

41 of 51Three small land parcels each have an estimated value of $10,000. If the parcels were combined through assemblage, the new larger parcel would be worth $45,000. The additional $15,000 in value that is created when the parcels are combined is best described as:

Answer 41

plottage.

Question 42

42 of 51Sharon is appraising a house in an area where horses and equestrian activities are very popular. A 25,000 square foot lot is the minimum size required in a residential area to have a horse on a property. Each 10,000 square foot increment permits the boarding of an additional horse. Buyers typically pay a $100,000 premium to board a horse on a residential property. In a neighborhood where most of the lots are between 25,000 and 28,000 square feet and sell for about $300,000, how should Sharon handle the adjustment for a subject property with a 23,400 square foot lot?

Answer 42

Adjust for the horse premium based on a market-derived $100,000

Question 43

43 of 51The cost to construct the subject residence is $150.25/SF. The effective date is March 10. The effective age is 10 years; the actual age is 25 years. The subject residence has experienced recent remodeling. The gross living area of the house is 2,125 SF. The remaining economic life is 65 years. The land to building ratio in the subject neighborhood is 1:3. Given the above data, which of the following ranges best represents the subject’s land value?

Answer 43

$90,000 - $95,000

Question 44

44 of 51When an oversupply of available land is coupled with stable demand, typically prices:

Answer 44

will decline.

Question 45

45 of 51Site

Answer 45

Land that is improved so that it is ready to be used for a specific purpose.

Question 46

46 of 51Assemblage

Answer 46

1. The combining of two or more parcels, but not necessarily contiguous, into one ownership or use; the resulting increase in value is called plottage. 2. The combining of separate properties into units, sets, or groups, i.e., integration or combination under unified ownership.

Question 47

47 of 51Which method of site valuation would be used to appraise a surface parking lot in a downtown area leased to a parking lot operator?

Answer 47

Ground rent capitalization

Question 48

48 of 51Which of the following is not an acceptable alternate means of valuing a single residential lot that is not income-producing?

Answer 48

Extraction method

Question 49

49 of 51Marginal Land

Answer 49

Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

Question 50

50 of 51Which appraisal method determines site value by deducting the depreciated value of improvements from the property’s sales price?

Answer 50

Extraction

Question 51

51 of 51Tony is contacted to appraise a piece of land owned by an oil company. The property is located across the street from his office. The land contains a gas station and a mini-mart. He calls the proprietor, Matthew, whom he happens to know well. Tony learns that Matthew owns only the building and that the oil company owns the land, which is leased to Matthew for the next 89 years. What is the most likely method that Tony should use to complete the appraisal?

Answer 51

Ground rent capitalization method