Certified Residential Appraiser Practice Exam

Which of the following is a land value technique?

1. Cost segregation analysis

2. Sales comparison

3. Fiscal forecasting

4. Market saturation studies

The correct answer is: Sales comparison

The sales comparison approach is considered a land value technique because it involves comparing the subject property to similar properties that have recently sold in the same or similar market. By analyzing the sale prices of these comparable properties, appraisers can derive a value for the land itself based on current market conditions and buyer behavior. This method is particularly effective in determining land value because it reflects the actual market trends and prices that buyers are willing to pay. In contrast, the other options listed focus on different aspects of real estate valuation or economic analysis. Cost segregation analysis is primarily employed to accelerate depreciation for tax purposes, rather than directly assessing land value. Fiscal forecasting deals with predicting economic outcomes based on various factors, which does not directly correlate with land valuation techniques. Market saturation studies analyze the supply and demand dynamics within a specific market but do not provide direct means to determine land value.