Property Valuation
The principle of 'highest and best use' in Montana appraisal means:
AThe most profitable use regardless of legal restrictions
BThe reasonably probable and legal use that produces the highest property value✓ Correct
CThe current use of the property
DThe use designated by local zoning only
Explanation
Highest and best use is the reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive (highest value). It forms the basis for all appraisal approaches.
Related Montana Property Valuation Questions
- In Montana, an appraiser's use of 'paired sales analysis' in the sales comparison approach involves:
- In Montana, when an appraiser concludes a property's value is $325,000 'as-is' but $380,000 'subject to completion of planned renovation,' the difference reflects:
- In Montana, when a commercial appraiser must estimate value for a 'leased fee' interest versus a 'leasehold' interest, they are valuing:
- In a buyer's market in Montana (excess supply relative to demand), an appraiser would typically find that comparable sales prices are:
- In the income approach, effective gross income (EGI) is calculated as:
- In Montana property valuation, 'economic obsolescence' refers to:
- A Montana appraiser inspecting a residential property notes a 'non-permitted addition.' In the appraisal report, the appraiser should:
- In Montana, the 'income capitalization approach' to appraisal converts expected future income into:
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