Property Valuation
An appraiser identifies a Florida property's highest and best use as commercial, but the current use is residential. The property value in this case is based on:
AThe current residential use value
BThe highest and best use as commercial, which will typically yield a higher value✓ Correct
CThe average of residential and commercial values
DThe cost to convert the property to commercial use
Explanation
An appraisal values property at its highest and best use — the most profitable, legally permitted, physically possible, and financially feasible use. If the highest and best use is commercial but the property is currently used residentially, the appraised value reflects the commercial potential. This may lead to a purchase that exceeds what the current residential use would justify, anticipating future development.
Related Florida Property Valuation Questions
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