Property Valuation
A Virginia appraiser determines that a property's highest and best use 'as vacant' differs from its highest and best use 'as improved.' This commonly occurs when:
AThe property is in perfect condition
BExisting improvements do not represent the optimal use of the land given current market conditions✓ Correct
CThe land has no value
DThe property has multiple owners
Explanation
When existing improvements are outdated or underutilize the land's potential (e.g.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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