Certified Residential Appraiser Practice Exam

What is the term for the value increment created when two or more sites are combined for greater utility?

1. Assemblage

2. Surplus Land

3. Excess Land

4. Wetlands

The correct answer is: Assemblage

The concept of assemblage refers to the process of combining two or more adjacent properties or parcels of land into a single site, which produces a value increment due to the enhanced utility and potential for development. This increase in value occurs because the combined properties may provide more opportunities for use, such as larger building footprints, better layouts, or improved accessibility, that are not available when the properties are considered separately. In the context of appraisal, assemblage is important because it reflects how much more valuable the properties are together than individually. This idea is pivotal in real estate development and valuation, as the potential for greater income or more intensive use can significantly affect the appraised value of the combined properties. Other terms like surplus land or excess land refer to different real estate concepts. Surplus land is land that is not currently needed but may be retained for future development or leasing opportunities, while excess land describes surplus land that does not contribute to the use of the primary property but could still hold some value on its own. Wetlands relate to environmentally sensitive areas and zoning issues, making them less relevant in this context. Hence, assemblage is the term correctly identifying the value increment resulting from the combination of properties.