Property Valuation
Highest and best use is defined as the use that is:
AThe current use of the property
BLegally permissible, physically possible, financially feasible, and maximally productive✓ Correct
CDesired by the property owner
DThe use with the highest construction cost
Explanation
Highest and best use is the reasonably probable use of land that is (1) legally permissible, (2) physically possible, (3) financially feasible, and (4) maximally productive (generates the highest return). This concept is foundational to real estate appraisal.
Related Pennsylvania Property Valuation Questions
- An appraiser notes that a Bucks County neighborhood has been appreciating at 5% annually. This market trend information is reflected in the appraisal through:
- An appraiser estimates the reproduction cost of a 1920s Philadelphia row home at $350,000 and calculates 40% total depreciation. What is the depreciated value of the improvements?
- A Pennsylvania condominium unit is being appraised. The appraiser should consider which unique valuation factor?
- A Pennsylvania appraiser's 'gross living area' (GLA) calculation for a residential property includes:
- A Pennsylvania appraiser performing a review appraisal (review of another appraiser's report) must:
- A 'discounted cash flow' (DCF) analysis in Pennsylvania commercial real estate appraisal is used to:
- The 'principle of conformity' in Pennsylvania real estate appraisal suggests that:
- An appraisal 'adjustment' for a superior feature in a comparable property is always:
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →