Property Valuation
In Illinois, a property's 'highest and best use' in appraisal practice is defined as:
AThe use that generates the highest gross income
BThe reasonably probable and legal use that is physically possible, appropriately supported, financially feasible, and maximally productive (highest value)✓ Correct
CThe use currently zoned by the municipality
DThe use preferred by the largest number of buyers in the market
Explanation
Highest and best use is a fundamental appraisal concept: the use that meets all four criteria—physically possible, legally permissible, financially feasible, and maximally productive (produces the highest value). An appraiser analyzes highest and best use both as vacant land and as improved. If the current improvement represents the highest and best use, the appraiser proceeds normally; if it does not, the appraiser may need to consider demolition and redevelopment.
Related Illinois Property Valuation Questions
- Physical deterioration that is 'incurable' in an appraisal means:
- In real estate appraisal, 'plottage' (or assemblage) refers to:
- When appraising a newly constructed building with no prior sales history, the appraiser would most heavily rely on the:
- When appraising a condominium unit, the appraiser must consider the:
- In real estate, a 'floor area ratio' (FAR) is used in zoning to express:
- An over-improvement is a property improvement that:
- The income capitalization approach to value is most commonly used for:
- The Illinois Department of Revenue's 'equalization factor' (the multiplier) is applied to assessed values in Cook County primarily to:
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