Property Valuation
The term 'highest and best use' in Indiana appraisal means the use that is:
AThe most profitable use regardless of legality
BLegally permissible, physically possible, financially feasible, and maximally productive✓ Correct
CCurrently in use on the property
DPreferred by the majority of neighboring property owners
Explanation
Highest and best use is the reasonably probable and legal use that is physically possible, appropriately supported, financially feasible, and results in the highest value — the foundation of all appraisals.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
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