Residual Method of Land & Site Valuation

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question 1 of 3

When is the residual method used in real estate?

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1. Which of the following is not a disadvantage to the residual method?

2. If land is bought for fifteen thousand dollars ($15,000), and development, maintenance, and resale total seventy five thousand ($75,000), and it is sold for one hundred fifteen thousand ($115,000), then what is the residual value of the land?

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About This Quiz & Worksheet

This quiz and worksheet evaluates what you remember about the residual method used in real estate. You'll review your understanding of how to use the residual method and determine the residual value of land.

Quiz & Worksheet Goals

This quiz and worksheet checks what you know about:

  • Defining the residual method in real estate
  • The disadvantages of using the residual method
  • How to determine the residual value of land

Skills Practiced

  • Knowledge application - use what you know about the residual method in real estate to answer a question about it
  • Interpreting information - verify that you read and were able to correctly interpret the disadvantages of using the residual method
  • Problem solving - use what you know about the residual method to find the residual value of land in practice problems

Additional Learning

If you are interested in learning more about this topic, you will find a more comprehensive overview in the lesson Residual Method of Land & Site Valuation. This lesson covers more details about:

  • What the residual land value refers to
  • People best qualified to use this method
  • Times when the residual method may be the right choice
  • Costs included in the residual method
  • Setting up an equation for the residual method
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