Property ValuationIntermediateDelaware Exam
In Delaware appraisal practice, what is 'highest and best use'?
AThe most profitable legal use of a property as if vacantCorrect
BThe use that generates the highest tax revenue
CThe current use of the property regardless of alternatives
DThe use designated by the local zoning ordinance
Why The most profitable legal use of a property as if vacant Is Correct
Answer A: The most profitable legal use of a property as if vacant
Highest and best use is the reasonably probable and legal use of property that is physically possible, appropriately supported, financially feasible, and maximally productive — resulting in the highest 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
Related Delaware Property Valuation Questions
- What is 'plottage' in real estate valuation?Property Valuation
- What is 'scarcity' as a principle of real estate value in Delaware?Property Valuation
- What is 'discounted cash flow' (DCF) analysis in Delaware commercial real estate?Property Valuation
- Plottage value results from:Property Valuation
- What is a 'market study' versus a 'marketability study' in Delaware real estate?Property Valuation
- A Delaware property is assessed at $180,000 with an assessment ratio of 60% of market value. What is the estimated market value?Property Valuation
- What is 'functional obsolescence' in real estate appraisal?Property Valuation
- In the income approach, what does a lower capitalization rate indicate about a Delaware investment property?Property Valuation
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →