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The Appraiser Coach Podcast

Listen while you drive to and from appraisal inspections as Dustin Harris, The Appraiser Coach, gives you helpful tips, tricks, ideas, and principles which will make you a better appraisal business owner. Dustin has been a successful real estate appraiser for many years. As the Appraiser Coach, he has made it his life’s mission to teach other appraisers across the country to also succeed and thrive as real estate appraisal business owners. Join Dustin each week as he keeps you informed with the latest in the appraisal profession, interviews movers and shakers, talks to your peers about what is important to them, and shares with you his secrets to incredible success.

Apr 9, 2017

Tim is back to teach us a little something about Highest and Best Use.  It may be the most important step in the appraisal process.  What is it, how do you do it, and what happens if you do it wrong?

Robert Lockwood
almost three years ago

They way I understand it, Highest & Best use is as it is CURENTLY zoned.

almost three years ago

Makes me think if over and under improved should be also addressed with the H&B use?

Scott L Gray
almost three years ago

Everyone knows that pigeon bones are more effective than chicken bones in determining H & B use.

almost three years ago

In my opinion it must simply be in your work file and summarized in the form for residential form reports. Especially when it is apparent R-1, PUD, residential restrictive covenants. For Rural areas one can expand how much is built up as commercial? What is the demand , etc. If destroyed is the demand changed now vs when it was developed? Most Feasible? The READER KNOWS THAT THEY ARE ORDERING A FORM REPORT WITH LINE ITEM STATEMENTS USED. If they want to order a narrative report then we can expand all points for them in the report and determine most feasible and highest and best bot including if it could be rebuilt and if destroyed- which could change if demand changes at a future date for known potential expansion etc. This is more relevant for an MAI for commercial work that is self contained in narrative form. And of course these MAI template their work too. With quick pick template comments that they adjust to fit every report. You get what you pay for. As an example rural no zoning comment. No formal zoning, no current demand for commercial due to less population density-demand in rural surrounds. Thus highest and best use and most feasible both are residential. If its grandfathered zoning then of course it should be expanded on. Yet if its apparent then I think work file support in typical homogeneous residential only areas is sufficient. The catch all COULD be misleading does not include that it IS misleaing. In our opinion that is in the eye of the reviewer and we know their reports are not narrative and self contained walk on water perfect either. This profession is a MATTER OF OPINION. And just because as an example commercial or multi family is allowed does not necessarily make it the better than residential current use. And furthermore if destroyed the highest and best use would need to be revisited at that time. ALL AS A MATTER OF OPINION IN AN OPINION BASED PROFESSION WHERE 2 VALUE OPINIONS HAVE NEVER BEEN EXACT. None of which apply for homogeneous residential zoned areas. Where the standard SUMMARIZED COMMENT WOULD APPLY.

almost three years ago

I thought the form states highest and best used as improved. Your podcasts talks about highest and best use as vacant. Could you please clarify. Are we supposed to be doing both analysis? If its highest and best used as improved then wouldn't it almost always not be economically feasible(not profitable to tear down and rebuild? Thanks