Property ValuationIntermediateCalifornia Exam

Plottage value (assemblage) occurs when:

AA property loses value due to being subdivided into smaller lots, consistent with USPAP appraisal standards

BTwo or more adjacent parcels are combined, creating a combined value greater than the sum of the individual valuesCorrect

CA property gains value through improvements that exceed neighborhood standards, per standard California valuation practice

DZoning changes allow higher-density development on a parcel, under standard appraisal methodology

Why Two or more adjacent parcels are combined, creating a combined value greater than the sum of the individual values Is Correct

Answer B: Two or more adjacent parcels are combined, creating a combined value greater than the sum of the individual values

Assemblage is combining adjacent parcels under one ownership. Plottage is the increment of value created because the combined parcel is worth more than the sum of individual parcels, as the larger site typically enables a more valuable and efficient use.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

Key Property Valuation Terms in This Question

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

People Also Study

Key Terms to Know

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Capitalization Rate (Cap Rate)

A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.

Gross Rent Multiplier (GRM)

A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.

Math Concepts

Profit & Loss

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Property Valuation Guide

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