Highest and best use

[Richard Goodfellow]

That is the case in this town. A lot of wealthy retired people that don't want to see the quaint town change. They have the time, money and knowledge to tie things up for years. Can't say I blame them. Wouldn't be surprised if a neighbor would pay over market just to control the property. To answer Richards comment above. I told the originator before I took the assignment that the land value is going to be very high, I wasn't sure about H&B use, and the property is going to need a considerable amount of repair. this was an FHA reverse mortgage. I have not heard but I doubt the owners will want to do all that is required to bring up to HUD property standards. I tried many times to get them to cancel it but they wanted to proceed.

 

[moh malekpour]

Moh

You are close but you forgot one important item; the demolition cost of any improvements when considering the site as vacant.

In short, H&BU of a property is its most profitable legally and physically permitted use. The calculation is made based on the value of the site as vacant less the demolition costs of any current improvements if any, compared to the value of the property in its present use.

Never forget the demolition costs in the equation.

Richard,
Did you read my post all the way down? I mentioned demolishing cost twice.
1- in deciding the H&BU of the land if it is an improved land
2- in my example of testing the H&BU of an improved land, I said the cost of demolishing is $3000. Pleas read all of it.

 

[Richard Goodfellow]

I got the message. thank you