Highest and Best Use Analysis Flashcards

An appraiser concludes the highest and best use of an improved property is its current use. This means the existing improvement:

Answer: Contributes value and should be maintained

If the current use is highest and best, the improvement adds value and continued use is supported.

Excess land is best defined as land that:

Answer: Is not needed to support the existing improvement and can be sold separately

Excess land is surplus to the existing use and may have its own independent highest and best use.

Surplus land differs from excess land in that surplus land:

Answer: Cannot be sold off separately and has no independent highest and best use

Surplus land cannot be separated for an independent use, unlike excess land.

Which principle most directly underlies highest and best use analysis?

Answer: Anticipation of future benefits

Value reflects anticipated future benefits, which highest and best use seeks to maximize.

A use that maximizes value but is not legally permissible should be:

Answer: Excluded from consideration

A use must pass the legally permissible test before it can be considered highest and best use.

When two competing uses are both legal, physical, and financially feasible, the highest and best use is the one that:

Answer: Produces the greatest net return to the land

Among feasible alternatives, the maximally productive use yields the highest net return to the land.

A change in zoning from residential to commercial would most likely affect highest and best use through the:

Answer: Legally permissible test

Zoning changes alter what is legally permissible, potentially shifting the highest and best use.