Highest and Best Use
- Topics:
- Property Management
- Tags:
- Appraisal,
- Chet Boddy,
- Conservation,
- Property
- Source:
- Chet Boddy
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Overview: The concept of “Highest And Best Use” is one of the most important and least understood principles in real estate. The highest and best use of a property, more than anything else, is what determines its value. Highest and best use is defined as that use, from among reasonably probable and adequately supported alternative uses, which is: legally permissible, physically possible, financially feasible, and maximally productive. Property is always valued on the basis of its highest and best use, which may or may not be its present use. Land value is based on the highest and best use of the property as if vacant and ready for development to that use. There is a controversy within the appraisal profession and the conservation movement regarding “non-economic” highest and best uses. Although there is growing support of conservation as a highest and best use, there are no widely-accepted methods for estimating its value. Current appraisal practice still requires that properties be appraised based on their conventional economic use (residential, commercial, industrial, etc.) regardless of their conservation potential.
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Format: HTML | Date: Jan 2003 | Pages: 1
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