Property Valuation
An appraiser determines that a Missouri industrial property's highest and best use is residential development rather than its current industrial use. The appraiser should:
AAppraise it based on current industrial use only
BAppraise it based on its highest and best use as if converted to residential, adjusting for conversion costs✓ Correct
CAverage the industrial and residential values
DOnly consider current income for value
Explanation
If highest and best use differs from current use, the appraiser values the property at its highest and best use, potentially with deductions for conversion costs (demolition, remediation). Current use value would also be considered as an alternative scenario.
Related Missouri Property Valuation Questions
- The sales comparison approach to value is MOST appropriate for:
- In Missouri, an appraiser's 'extraordinary assumption' is used when:
- The principle of conformity in Missouri appraisal means that:
- In Missouri, when an appraiser uses a 'before and after' appraisal method in a partial condemnation, they are calculating:
- A Missouri home has a replacement cost new of $220,000, total depreciation of 25%, and land value of $50,000. What is the cost approach value?
- Which type of depreciation in Missouri is considered incurable because the cost to fix it exceeds the value added?
- In Missouri, a property's 'potential gross income' (PGI) differs from 'effective gross income' (EGI) because:
- In Missouri, a 'detached garage' added to a residential property would typically be classified as:
Practice More Missouri Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Missouri Quiz →