Property Valuation
What is 'highest and best use' in real estate?
AThe use that produces the tallest building
BThe most profitable, legally permitted, physically possible, and financially feasible use of a property✓ Correct
CThe use preferred by the local government
DThe current use of the property
Explanation
Highest and best use is the reasonably probable use that is: legally permissible, physically possible, financially feasible, and maximally productive (most profitable).
Related California Property Valuation Questions
- Gross Rent Multiplier (GRM) is calculated as:
- Under the principle of conformity, property values are maximized when:
- A property generates a net operating income of $50,000 and is valued using a 5% cap rate. What is the estimated value?
- An appraiser conducting 'paired sales analysis' is attempting to:
- The 'highest and best use' of a property is defined as the use that is:
- When does the income approach provide the MOST reliable value indication?
- The principle of substitution states that:
- In a 'buyer's market,' real estate prices tend to:
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