is the H&BU AS IMPROVED the current use?", the answer would always have to be yes, eh?
A vacant lot and an improved lot "as is" vs "as if vacant" is the test. The ideal improvement does not exist for either the bare lot or the improved lot...unless the house is "ideal" - i.e.- new, perfect size for the market, no functional issues, etc. BUT "as is" the vacant lot is the highest use available and that could be used for a garden, or to build on, or to do nothing. It's value isn't going to change. It does have a value in use to the owner, otherwise they'd sell it or development. But that is speculating about a future use. Again, here, now, today, it is a vacant lot and that is the HBU of it.
Likewise, the improved lot "as is" is the HBU
even if the zoning were different, but was still worth more than the bare lot. It only is a factor if the lot "as if vacant" was worth more than the improved property. We see that when a "tear down" sells and a new home is erected. Therefore, HBU is not an explicit future use of an individual parcel - either vacant or improved.
Again, the agricultural issue where many (if not a majority in my state) of moderate to larger farms consist of 2 or more parcels. I am not about to value those parcels separately as if they were entirely different uses simply because one has a barn or house and one is a vacant field, even if the region is in transition from agriculture to smaller residential parcels, greenfield subdivisions, etc. Due to assessor regulations in my state, even if transferred as a single entity, a parcel that includes land in two different sections gets two different tax parcel numbers.
In a residential lot, assuming both are HBU
as if vacant, the lot values are the same. The single grid added is a stand alone sales approach. It is applicable to Lot Vacant or Lot Improved. And the improvements of the improved lot are likely the HBU although they may not be ideal (hence may have external or functional issues) But HBU is not a measure of the ideal improvement IMNSHO. It is simply a question, the use that yields the highest present land value (as vacant) or "implies that the existing improvements should be renovated or retained so long as it continues to contribute to the total market value...." (10th ed, ARE). For rural farm land "improved" could mean irrigation, fencing, etc. But when the land transitions to residential, those improvements are worth more dead than alive. HBU and buyer motivations are important. I had a friend hunt for a house with a separate small shop building for his leathercraft hobby. It took him over a year to find it. Although scarce in the market, was it the highest and best use of the property? Yes. Did it suffer a functional obsolescence? Yes, likely. It didn't return a $ for $ contribution to the dwelling had he simply bought a house and built a shop of similar utility. Just because there was functional obsolescence in the shop does not mean it isn't the HBU of the property despite only an occasional buyer who really wanted or needed that accessory unit.
Likewise a ranch or farm isn't valued by summing the values of the individual land parcels, no matter how readily they could be parceled off. That is summation - which is normally discouraged, or at least, needs careful study. The totality of the property is what is being appraised. Just as we would treat a partial interest or estate, likewise we can value multiple lots under one economic unit, even when we by either scenario need to step back and examine the impact of summation or disaggregation.
Clearly, in many cases, a vacant lot sold separately from an improved adjacent lot may sell for "market" and may sum to a higher price than if sold together as one economic unit. In that case it acts more like a surplus lot than excess. 10 years ago you couldn't give lots away. We sale lots being sold for $5,000 to $10,000. But no one wanted them. The same subdivisions today are selling those lots for $40,000 or more.
