Question

Which of the costs associated with the purchase of undeveloped land would be included in the land value? (Check all that apply.)

a) the building built on the land
b) sales commissions
c) survey fees
d) title fees

Answer 1

When purchasing undeveloped land, sales commissions, survey fees, and title fees are included in the land value. These costs are essential for the sale and legal transfer of the property. Buildings on the land are not included in the land's value.

Step-by-step explanation:

Included Costs in Land Value

When purchasing undeveloped land, certain costs are included in the land value. These costs are critical for ensuring that the land is properly surveyed and the ownership is legally recognized. The costs that are included in the land value are:

• Sales commissions: Expenses paid to real estate agents or brokers for facilitating the sale.
• Survey fees: Costs incurred for having professionals determine the exact dimensions and boundaries of the property.
• Title fees: Expenses associated with ensuring that the title to the land is clear and transferring it to the new owner.

It is important to note that any buildings built on the land would not be included in the value of the land itself, as buildings are considered improvements and have a separate value from the land.