Highest and Best Use

Ascertain the value of likely uses of the property and select the Highest and Best Use. But there are problems with this method too, because, often the same use can be of different value to different buyers. During the 1980's high tax bracket investors would purchase a rent house for twice as much as the property was worth. Appraisers would immediately pick-up on the sale, and property values in the area double overnight. What the appraisers neglected to notice was the tax bracket of the buyer and that the high price might not be appropriate for a low tax bracket purchaser. When the tax law changed in 1987, many low tax bracket purchasers were stuck with over priced assets.