Property Valuation
What does 'highest and best use' mean in appraisal?
AThe use that produces the most rent
BThe legally permitted, physically possible, financially feasible, and maximally productive use of a property✓ Correct
CThe use the current owner prefers
DThe use permitted under existing zoning without a variance
Explanation
Highest and best use is the reasonably probable use that is legally permissible, physically possible, financially feasible, and that produces the greatest value for the property. It is the foundation of all appraisal analysis.
Related Arkansas Property Valuation Questions
- What is the purpose of a Broker Price Opinion (BPO)?
- In the income approach, the overall capitalization rate (OAR) is most reliably derived from:
- Effective age differs from chronological (actual) age in that effective age reflects:
- An appraisal 'adjustment for time' is needed when comparable sales:
- Which appraisal approach estimates value by analyzing recent sales of comparable properties?
- Physical depreciation that cannot be economically repaired is classified as:
- External obsolescence in property valuation is caused by:
- A comparable property sold for $310,000. It has one more bathroom than the subject. The market value of a bathroom is $8,000. The adjusted sale price of the comparable is:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →