Property Valuation
An NJ appraiser determines that a property's highest and best use is as a multi-family residential property rather than its current use as a single-family home. The appraiser should value the property:
AOnly at its current single-family use value
BAt its highest and best use value (multi-family potential), reflecting what the market would pay for the redevelopment potential✓ Correct
CAt the average of single-family and multi-family values
DBased solely on the current improvements
Explanation
Market value is based on highest and best use. If the market recognizes the property's value as a multi-family redevelopment site, the appraiser must reflect this in the value conclusion, even if the current use is as a single-family home.
Related New Jersey Property Valuation Questions
- The principle of highest and best use requires that a property be used in the manner that is:
- The income capitalization approach to value is most appropriate for:
- External (economic) obsolescence is unique among types of depreciation because it is:
- A NJ appraiser notes that a comparable sale has an 'arm's length' notation in the MLS. This means:
- The 'before and after' method in NJ appraisal practice is used primarily for:
- In NJ's Jersey City market (Hudson County), proximity to which of the following primarily drives premium property values?
- When appraising a NJ property using the cost approach, the appraiser estimates replacement cost new and then deducts:
- Under the income approach to value, the capitalization rate (cap rate) is used to:
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