What is the definition of Highest and Best Use?

The definition of Highest and Best Use refers to the most profitable and optimal use of a property that is legally permissible, physically possible, financially feasible, and maximally productive. In this context, the answer is correct because it encompasses several critical factors that appraisers must consider when evaluating a property's potential value.

Legality ensures that the intended use adheres to zoning laws and regulations. Feasibility considers whether the use can physically be implemented, taking into account the site characteristics and development capabilities. Productivity assesses whether the proposed use will generate acceptable returns on investment. Therefore, the formulation in the correct answer encapsulates a comprehensive analysis of how to determine the best utility of a property, which is essential in appraisals and property assessments.

Understanding Highest and Best Use is crucial for appraisers because it directly impacts property valuation and the strategic planning of real estate investments.