Certified Residential Appraiser Practice Exam

What term describes the potential increase in value from combining two or more adjacent lots?

1. Plottage

2. Assemblage

3. Lot Value

4. Parcel Growth

The correct answer is: Plottage

The term that describes the potential increase in value from combining two or more adjacent lots is "plottage." This concept reflects the idea that the combined value of multiple lots is greater than the sum of their individual values due to factors such as improved utility, increased marketability, or the ability to build larger structures or developments that would not be possible on the individual lots. This increase in value occurs because the integrated land can be developed more efficiently or to a higher purpose, providing greater potential for return on investment. In contrast, "assemblage" refers more to the actual process of combining the separate parcels into one larger parcel. While it does relate to the concept of plottage, it doesn't specifically denote the increase in value that results from that combination. Lot value and parcel growth are terms that do not specifically pertain to the combined value derived from merging properties. Understanding the distinction between these terms is crucial for appraisers when evaluating the value implications of land transactions.