What is the definition of "highest and best use" in real estate valuation?

The definition of "highest and best use" in real estate valuation centers around the concept that it refers to the use of a property that maximizes its value while being legally permissible and physically possible. This means that the highest and best use is not just about potential profit, but also considers the legal restrictions surrounding the property (such as zoning laws), physical characteristics (like topography or access), and financial feasibility.

This answer encapsulates the essence of highest and best use by addressing the need for the property use to not only be the most profitable but also align with legal and physical constraints. The highest and best use is essential in real estate appraisal as it guides appraisers in determining value based on what the property could be used for in the most beneficial way, taking into account all relevant factors.

The other options focus on aspects of property use that don't fully embody the comprehensive nature of the highest and best use concept. For instance, while one option mentions legal use, it neglects the physical possibilities, and another option speaks solely about profitability at a specific time but doesn’t incorporate the required legal and physical considerations.