Valuation and Financing Practice Question
Question
A salesperson is explaining a concept to a client involving highest and best use. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 2)
Answer choices
- A. It makes oral promises enforceable in every real estate transaction.
- B. Recognize the legally permissible, physically possible, financially feasible, maximally productive use.
- C. It is optional whenever both parties verbally agree to proceed.
- D. It allows a salesperson to act independently of the responsible broker.
Correct Answer
B. Recognize the legally permissible, physically possible, financially feasible, maximally productive use.
Explanation
The correct answer is B because highest and best use requires candidates to recognize the legally permissible, physically possible, financially feasible, maximally productive use. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: easy
- Domain: Valuation and Financing
- Objective: highest and best use