The highest and best use must be a use that is allowed by government. The highest and best use of a property is the reasonable and probable use that will support the highest present value as of the effective date of the appraisal. This entails identifying the most appropriate market and the most profitable use within that market. The concept of highest and best use requires that each property be appraised as though it were being put to its most profitable use (highest possible present net worth), given probable legal, physical, and financial constraints. Principle of Increasing and Decreasing Returns.Although these principles are individually listed, many of the principles are interrelated or affect the other in determining real property value. These underlying appraisal principles are important in understanding the foundation of the income approach to value and the actions of typical buyers and sellers in the real property market. Therefore, we begin this lesson by first reviewing some of the basic concepts of real estate economics that affect how typically informed buyers and sellers respond in an open market, and then reviewing some concepts and principles applicable to the income approach.īased on observation and analysis of real estate markets, appraisers have developed principles to describe how real estate markets operate. Appraisers emulate what informed buyers and sellers will do in an open market. The value of real property can be influenced by many factors, such as location and type of use however, when appraisers make/render an opinion of market value, they must also take into consideration how typical buyers and sellers are responding in the market.
Lesson 2 – Basic Economic Principles of Real Property Value (The Income Approach to Value) Appraisal Training: Self-Paced Online Learning Session Electronic Journal of Sociology, 7, ISSN: 1198 3655. Human rational behavior and economic rationality. Australian Journal of Social Issues, 31(1), 39–54. Interpreting contemporary contractualism.
Australian Journal of Social Issues, 40(1), 155–180. From social issues to social policy: Engaging professionals and the public. Schumpeter and Knight on economic and political rationality: A comparative restatement. Paper presented at the Workshop on “Rationality and Commitment”, University of St. The weak rationality principle in economics. The community service sector in the era of the market model: Facilitators of social change or servants of the state. Australian Journal of Legal Philosophy, 22, 1–14. Ignorance, discovery and choice – A requiem for economic rationalism. Market theory in human services: Dancing with wolves or better choice? Interaction, 11(1), 21–25. Utility: Equivocation and demoralization. Koppl (Ed.), Evolutionary psychology and economic theory, Advances in Austrian economics, Vol. Commentary on Gummerum, Hanoch and Keller. Psychological limits of economic rationality: Relational contexts and cognitive irrationality.
0 kommentar(er)
