Property Valuation
In NJ real estate appraisal, 'highest and best use' is defined as the reasonably probable use of property that is:
AThe most profitable use regardless of legal restrictions
BLegally permissible, physically possible, financially feasible, and maximally productive✓ Correct
CThe use desired by the property owner
DThe use designated by the local zoning ordinance only
Explanation
Highest and best use is the use that meets all four criteria: legally permissible under zoning and other regulations, physically possible given site characteristics, financially feasible to implement, and maximally productive in terms of value.
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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.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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