An Arizona commercial appraiser determines that a property is NOT at its highest and best use because current zoning restricts a more profitable use. The appraiser should:
Why Note the zoning restriction but consider whether it is probable that the zoning could be changed, impacting value Is Correct
Answer B: Note the zoning restriction but consider whether it is probable that the zoning could be changed, impacting value
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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Key Terms to Know
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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