Property ValuationIntermediateCalifornia Exam

Plottage value refers to the increased value resulting from:

AZoning a property for a higher use, per standard California valuation practice

BCombining two or more adjacent parcels into one larger parcelCorrect

CImproving the physical condition of the property, under standard appraisal methodology

DComparing sales of similar properties, as typically applied in a comparative market analysis

Why Combining two or more adjacent parcels into one larger parcel Is Correct

Answer B: Combining two or more adjacent parcels into one larger parcel

Plottage (or assemblage) value is the increment of value created when two or more adjacent parcels are merged into a single, larger parcel. The combined value of the merged parcel typically exceeds the sum of the individual parcels' values.

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

Comparable Sales (Comps)

Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.

Zoning

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

Depreciation

A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.

Appraisal

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

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