What Is Highest and Best Use?
Highest and best use is the legally permissible, physically possible, financially feasible use of a property that produces its maximum value — the foundational assumption behind every appraisal.
Why it matters
A property is appraised based on its highest and best use, not necessarily its current use — a small home on land zoned for a high-rise may be valued primarily for its redevelopment potential.
Related Terms
More Commercial & Appraisal Terms
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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