highest and best use of land

Sunday, August 21, 2022 Edit

So before you lock yourself into commercial development be sure to consider residential highest and best use for the land as well. What makes transitional land a unique area of real estate brokerage is the fact that the ultimate use of the property might not be easily recognized.

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Highest and Best Use Example.

. Typically when we think of transitional land we think of an agricultural property whose highest and. According to The Uniform Standards of Professional Appraisal Practice 2002 highest and best use is defined as The reasonably probable and legal use of property that is physically possible appropriately supported and financially feasible and that results in the highest value. Four Tests of Highest and Best Use The four tests of highest and best use are.

The highest and best use of a specific parcel of land is not determined through subjective analysis by a property owner developer real estate agent or appraiser. By Roche Realty Group. Intended use of the appraisal was to secure mortgage financing.

The concept of financial feasibility has been discussed on this site elsewhere in more details. Our focus of this post will be on maximum productivity. Valuing a property with the concentration of what the property could become to achieve the highest form of profitability is called highest and best.

I hate this term. However this value is not static. This use must be legally permissible physically possible financially feasible and maximally productive Conducting a Highest and Best Use Analysis.

To me it proposes two potentially opposite. O highest and best use of property to be short-term holding development property and o market value estimated to be 1000000. The Appraisal Institute defines highest and best use as follows.

Explain highest and best use though vacant The permitted use of the land assuming the land to be vacant or capable of being made vacant by demolishing existing improvements that yields the highest present land value after deducting costs of labor capital and coordination. But rather it is a use shaped by the competitive forces within the market where the property is located. Legal permissibility physical possibility financial feasibility maximum productivity We will briefly touch the first two concepts.

The standard used to evaluate and measure land use and commercial development has always been What is the highest and best use of the site. According to Jim Pruitt and the Dictionary of Real Estate Appraisal 6 th Edition Highest and best use is the reasonably probable use of property that results in the highest value. Well help you determine exactly what will be the most profitable for you in the long run.

The reasonably probable and legal use of vacant land or an improved property that is physically possible appropriately supported financially feasible and that results in the highest value. In a real sense the definition of highest and best use encompasses four tests. The four criteria the highest and best use must meet are.

Roche Realty Group Blog. About one year later mortgage foreclosure proceedings commenced. Explain highest and best use as improved.

If you need help finding land or determining the highest and best us give us a call at 602-492-9242 or visit us online. Valuation of Land Commercial Development. In fact the very nature of transitional land is that the highest and best use is dynamic.

1 legally permissible 2 physically possible 3 financially feasible and 4 most profitable. The first two tests are interchangeable in order and in many circumstances the last two are combined. An area of land may be considered to be at its highest and best use when it provides the optimum return to its owner or user which may be as measured in monetary terms or in intangible and social values or a combination of such values.

Mortgage loan advance was completed based shortly thereafter.

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