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VALUATION ANALYSIS <br />The purpose of this valuation study is the estimation of market value of the <br />unencumbered fee simple interest in the subject underlying land parcel <br />based on the hypothetical condition that the site is fully entitled for the <br />development of a 7 -unit residential townhouse complex as proposed. Said <br />development represents the highest and best use of the subject land. <br />A hypothetical condition is defined in The Dictionary of Real Estate Appraisal, <br />Sixth Edition, Page 113, published by The Appraisal Institute, as, "A condition, <br />directly related to a specific assignment, which is contrary to what is known <br />by the appraiser to exist on the effective date of the assignment results, but <br />is used for the purpose of analysis. Hypothetical conditions are contrary to <br />known facts about physical, legal, or economic characteristics of the subject <br />property, or about conditions external to the property, such as market <br />conditions or trends; or about the integrity of data used in an analysis." In <br />the event conditions relating to the use of the hypothetical condition do not <br />materialize, assignment results set forth herein might be affected. <br />Prior to the application of the appraisal process, which in this case employs <br />the Sales Comparison Approach, as applied to residential land value, it is <br />necessary to consider and analyze the highest and best use of the subject <br />property. <br />HIGHEST AND BEST USE ANALYSIS: <br />Highest and best use is defined in The Appraisal of Real Estate, by the <br />Appraisal Institute, 14th Edition, Page 332, as: <br />"The reasonably probable and legal use of property that results <br />in the highest value." <br />In the process of forming an opinion of highest and best use, consideration <br />must be given to various environmental and political factors such as zoning <br />restrictions, probability of zone change, private deed restrictions, location, <br />land size and configuration, topography, and the character/quality of land <br />uses in the immediate and general subject market area. <br />There are three basic criteria utilized in the highest and best use analysis of <br />a property as if vacant, as well as presently improved. The three criteria are <br />summarized as follows: <br />1. Physically possible. <br />2. Legally permissible. <br />3. Financially feasible. <br />LED ARDANDASSOCIATES <br />APPRAISERS CONSULTANTS <br />20D-38 <br />