Mastering Arizona Real Estate: Understanding Lot Value

Which of the following lots will sell for more if Lot A is 350 x 200 and Lot B is 200 x 350, with commercial lots selling for $500 per front foot?

• A. Lot A
• B. Lot B
• C. They'll sell for the same amount
• D. Need more information

Answer: (A)

The reasoning behind the correct choice involves understanding how commercial lot prices are calculated based on their dimensions and the value assigned to each front foot. Lot A measures 350 feet along one side and 200 feet on another, while Lot B measures 200 feet along one side and 350 feet on another. In commercial real estate, the selling price often hinges on the "frontage" available, which refers to the amount of street or road-facing side of the lot. In this case, since commercial lots sell for $500 per front foot, it's crucial to consider the lengths of the sides that will contribute to the effective sale price. For Lot A, with its depth of 200 feet and frontage of 350 feet, the total front feet can be calculated entirely from its longer side. Thus, Lot A has a significant frontage that maximizes its value, leading to an estimated price of $175,000 (350 feet * $500). Conversely, Lot B has 200 feet of depth and a frontage of 350 feet as well. However, when considering which dimension contributes to the overall appeal and value of the lot, the arrangement of these dimensions plays a role. Despite having the same linear measurement on one side, the depth and street

Understanding the fundamentals of lot valuation is crucial for anyone aiming to pass the Arizona Real Estate License Exam. You'll want to get a firm grip on why different lots, even with seemingly similar dimensions, can have greatly varying values. Let's unpack this with a digestible example that’s sure to stick in your mind—because, honestly, who wants to memorize endless formulas?

Picture this: you’ve got two lots before you—Lot A, which measures 350 x 200 feet, and Lot B, measuring 200 x 350 feet. At first glance, they might seem like they could hold the same value, right? Here’s the catch: in commercial real estate, it’s all about “frontage.” So let’s break that down.

When determining how much a lot sells for, realtors look at the amount of street or road-facing footage—this is where the magic happens. Since commercial lots in Arizona are selling for $500 per front foot, knowing which lot has more “frontage” is key to unraveling their value.

For Lot A, you’ll find 350 feet of frontage to work with. When you do the math—350 feet times $500—you land at an impressive $175,000. That’s a solid cherry on top for any real estate deal. Now, let’s flip over to Lot B. It, too, has that same 350-foot frontage, but it’s got only 200 feet of depth. This is where things get fascinating. The arrangement of the dimensions plays a considerable role in the overall appeal and functionality of the lot, and ultimately, its pricing.

So why does Lot A outshine Lot B in this scenario? It boils down to marketability. A greater depth paired with substantial frontage usually means better prospects for development. Buyers often have a clear vision of what they can build, which can make one lot more desirable over another—even if the measurements seem similar at first glance.

As you study for the Arizona Real Estate License Exam, keep in mind that the score isn't just about recognizing numbers—it's about understanding how these numbers translate into real-world value. Remember, dimensions lay the groundwork, but the interplay between them is what truly drives value in commercial real estate.

Want more insight? Consider how zoning laws and local demand factors into these valuations, too! An area that's booming with businesses? Well, that’s gold for your lot’s value. Who would’ve thought little numbers could have such massive implications in the real estate game?

So, as you crack those books, think of this analysis like a puzzle. You’ve got the pieces with the lot dimensions and corresponding values. When you fit them together, you’re unlocking the bigger picture—and that’s what will make you shine on your exam day!