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Yes, a highest and best use analysis is part of USPAP. So, that means each appraisal and report must have one. It is true, the archaic 1004 form limits this to a checkbox. That’s really dumb! If the GSEs are so hot about one, why not give us some room on the form to put it in? Don’t hold your breath, though! It ain’t happening! So that means we have to roll it over to the addendum. There’s nothing wrong with that, really. But it makes the appraisal report hard to read. But the GSEs blame us for that, not their damnable form. Go figure!
Therefore, how do we do about credibly reporting highest and best use? USAP makes it clear there are five (5) components to it. Because of this, a credible H&BU analysis covers all five of them. How? Well, the first step to credibility is simple. Get rid of the boilerplate we appraisers use so constantly! Yes, boilerplate saves time! But our analyses of H&BU must be property specific! If the subject site were vacant, what are the ideal improvements to put on it? Don’t know? Why?! That is part of what USPAP requires we tell the client!
Where do we go to learn more about highest and best use? All of the major appraisal societies offer seminars on it. Don’t know how to write a credible H&BU analysis? Don’t understand how to tie H&BU and your value conclusion together? What to keep your state appraisal board out of your back pocket? There are consultants out there who will be glad to help!
Really, when it comes to any confusion over highest and best use, there is a place to go for help. Thanks! My Best to you and all of yours!
Thank you for your podcast. They are so well thought out and full of information. I always enjoy and learn something every time. Most are short, which is good for a busy appraiser. I might use some of your thoughts to come up with a new sentence about comp selection. Also, if I get a crazy ROV with suggested sold properties that are nothing like the subject some of the content here would be good to use as a response.
Thank you, Jill! Given my short attention span, I must keep the podcasts short! Please get in touch if I can be of further help. My Best!
Thanks, Jill! You are kind to respond. ROVs can be the bane of our existence. I hope this podcast helps you to get fewer of them! My Best!
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