Term
| Highest and Best Use may be defined as... |
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Definition
| The reasonably probable and legal use of vacant land or an improved property that is phisysically possible, appropriately supported, and financially feasible |
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Term
| In the analysis as though vacant, the appraiser seeks to answer... |
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Definition
- Should the land be developed or left vacant?
- If left vacant, when would future development be financially feasible?
- If developed, what kind of improvement should be built?
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Term
| In the analysis as though improved, the appraiser seeks to answer... |
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Definition
- Should the existing improvements on the property be maintained in their current state, should they be altered in some manner to make them more valuable, or should they be demolished
- If renovation or redevelopment is warranted, when should the new improvements be built
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Term
| If the value of a property as improved is greater than the value of the land as vacant... |
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Definition
| the highest and best use is the use of the property as improved |
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Term
| 4 tests of Highest and Best Use |
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Definition
1a. Legally permissible
1b. Physically Possible
2. Financially feasible
3. Maximally Productive
*as long as you test the first two before the financial test it is fine |
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Term
| If apply the highest and best analysis as vacant, the three possibilities are... |
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Definition
- Continuation
- Modification
- Demolition and Redevelopment
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Term
What may preclude many potential uses when testin the legal permissibility?
Vacant |
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Definition
- Private restrictions
- zoning
- building codes
- historic district controls
- environmental regulations
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Term
What affects the use when testing the phisical possibility?
Vacant |
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Definition
- size
- shape
- terrain
- accesibility
- risk of natural disasters
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Term
What constitutes whether it is financially feasible?
Vacant |
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Definition
| as long as a potential use has value commensurate with its cost and conforms to the first two tests |
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Term
The conclusion of highest and best use should be clearly stated in terms of...
Vacant |
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Definition
- Use
- Timing
- Market Participants
- Users
- Most probable buyers/tenants
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Term
What are the three possibilities that must be considered.
Improved |
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Definition
- Demoliksh and redevelop
- Continue
- Modify
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Term
| When would you analyze highest and best use as improved, but the land is vacant? |
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Definition
- Subject to the hypothetical condition
- Subject to the extraoridanry assumption
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Term
| Principal of Consistent Use |
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Definition
| land cannot be valued based on one use while improvements are valued based on another |
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