HIGHEST AND BEST USE

Who Determines the highest and Best Use?

This process is used to identify the competitive position of a property in the minds of market participants. The market makes decisions every day about real estate using these criteria. So the highest and best use of a parcel is not determined through subjective analysis by the property owner, the developer, or the appraiser. Rather, it is shaped by competitive forces in the subject market. Identifying the highest and best use of a specific property often involves market research and analysis.

Highest and Best Use Example:

Sometimes the highest and best use of a property is not its current use. Imagine an older single-family residence on a lot located on a major roadway within city limits with a high traffic count and being surrounded by commercial office uses.

The highest and best use of this property may be to raze the improvements and sell the land as vacant for office development…but not necessarily. As long as the value of the property as improved is greater than the value of site as vacant, the highest and best use is still the existing use. The cost to demolish those existing improvements must also be considered and may further support the current use as the highest and best.

Conclusion:

So, before you rent a dozer and tear down your house, give us a call. Aside from appraisals, we can provide consultation, perform market studies, and help determine highest and best use before you break ground.

Is your farm suited for duck hunting? How high should the sidewalls be on your industrial shop space? Are you charging enough rent for your office space? These are all questions that we can answer with market analysis and highest and best use considerations.

Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.

Guest User March 7, 2020 farm appraisal, land, home appraisal