When two adjacent pieces of property are joined together, the value of the one larger parcel may be greater than the value of the two separately. Which principle of value is this?

Question

Kaiden Farley

Business

9 October, 05:49

When two adjacent pieces of property are joined together, the value of the one larger parcel may be greater than the value of the two separately. Which principle of value is this?

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Answers (1)

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Memphis Jacobson · Answer 1

Assemblage with reference to the principle of value

Explanation:

Assemblage in real estate represents the combination of two or more parcels of land with goal of selliing them as one parcel. The reason for assemblage as also asked in the question is the fact that the combination of the lands tends to bring a price that is bigger than the combined price of selling the lands separately

For instance, Property A sells for $100,000 while Property B sells for $50,000. Selling these two separately brings a totla of $150,000. However, combining Properties A and B may give the impression of a really massive property that can then be sold for $200,000.

Also, a buyer may not be really interested in a piece of property but adding an other piece of property just beside the first could kindle more interest making the buyer willing to pay more for the combined property.