Which four criteria must ALL be met for a use to qualify as the highest and best use of a property?
Correct Answer
B) Legally permissible, physically possible, financially feasible, and maximally productive
Highest and best use is defined as the reasonably probable use of a property that is: (1) legally permissible — allowed by zoning and other regulations; (2) physically possible — supported by the site's size, shape, and terrain; (3) financially feasible — capable of generating a positive return; and (4) maximally productive — producing the highest value among feasible uses. All four tests must be satisfied.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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