Property Valuation
A Minnesota appraiser determines that a property's highest and best use as vacant would be multi-family residential, but as improved (with a single-family home), the highest and best use is single-family residential. The property is most likely:
AOverdeveloped for its zoning
BUnderdeveloped for its potential✓ Correct
CProperly developed for its current use
DUnder-appraised by market comparables
Explanation
When the highest and best use as vacant (what should be built) differs from the highest and best use as improved (what's already there), the property may be underdeveloped. A single-family home on land zoned for multi-family use may not be making optimal use of the site. This is called a site that is ripe for redevelopment. Such properties often have site value higher than the contribution of the improvement.
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