Property ValuationIntermediateCalifornia Exam

What is 'assemblage' in real estate?

AThe construction of a new building, as typically applied in a comparative market analysis

BThe combining of two or more adjacent parcels into one larger parcelCorrect

CThe process of subdividing land, consistent with USPAP appraisal standards

DThe appraisal of multiple properties at once, per standard California valuation practice

Why The combining of two or more adjacent parcels into one larger parcel Is Correct

Answer B: The combining of two or more adjacent parcels into one larger parcel

Assemblage is the process of combining two or more adjacent parcels into a single, larger parcel. The resulting increase in value is called 'plottage.'

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.

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Key Terms to Know

Appraisal

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

Comparable Sales (Comps)

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

Depreciation

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

Capitalization Rate (Cap Rate)

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

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