Appraisals That Can Help Persuade the Government Your Property Is Worth More
When the government says they're going to take your land, you may feel frustrated, as many people do.
The first step is to understand that the condemning authority is legally empowered to take private land for a public purpose. Basically this means that you probably aren't going to be able stop the project or keep the condemning authority from taking your land. To some, this feels like bullying, and in our opinion, understandably so.
But once you can come to terms with the situation, you can turn your focus toward making sure the condemning authority gives you a fair amount for your property.
"Just Compensation" for Your Property
The condemning authority is required to pay you 'just compensation' for what they take and for any damage to your remaining property. If they're not taking your whole property (as is often the case), just compensation is the difference in the value of the property before the taking occurred, compared to the value of the property immediately after the taking.
The just compensation value is supposed to be based on the highest and best use of the property being taken. In general, this means an appraiser must consider how much your property is worth as you're currently using it, as well as how much it might be worth for any other reasonable uses. Whichever "reasonable use" would provide the highest value is considered the highest and best use.
The Government's Appraisal Versus Yours
In order to determine the amount of just compensation, the condemning authority will generally hire an appraiser to perform a value opinion or full appraisal of the property. A full narrative appraisal performed by an appraiser working for a condemning authority can often be 50 to 100 pages. This appraisal can be intimidating. Due to the length and detail of the condemning authority's appraisal, many owners believe that the appraisal value must be accurate and that there is little they can do.
However, an experienced attorney can help the property owner level the playing field by hiring an independent appraiser to conduct their own inspection and give their opinion on how much your property is worth. This independent appraisal may either confirm that the condemning authority's offer of just compensation is fair, or it may help provide leverage in negotiations with the condemning authority to get a fair value for the property taken.
The independent appraisal is an important tool, but you need to make sure you get the right kind or you could end up paying for something that won't help you at all. Many people's experience with an appraisal comes from buying a home, and a standard home appraisal can cost a buyer as little as $300.
Unfortunately, this kind of appraisal will probably not collect all of the information you will need to negotiate against the government's appraisal. You will need a "Comprehensive Value Analysis" appraisal (if you have an eminent domain attorney, they will typically facilitate this), which typically costs significantly more than a standard home appraisal. However, this can be money well-spent if it generates a higher offer for your property. Ask your eminent domain attorney for advice on whether or not they think this type of appraisal would be a good investment for you.
Why Can't I Use a Standard Home Appraisal?
In a standard appraisal situation, which is typically when someone is buying a home, the appraiser generally determines the value of the house by comparing it to similar houses in the area. These standard appraisals aren't looking at what the potential value of the underlying land is if, for example, the owner someday decided to build a convenience store on it. But land that could host a convenience store could be much more valuable and this is the kind of information that the Comprehensive Value Analysis would take into account.
Plus, because just compensation is the difference in property value before and after the taking, the comprehensive appraisal must determine the highest and best use of the property immediately before, and also immediately after the taking. One property can have many potential uses both before and after. Since an eminent domain appraisal is more thorough and attempts to take all of these potential uses into account, it's like getting many appraisals in one.
For example, let's say you live in house that's been in your family for generations. Shopping centers and business parks have slowly crept up all around you. You've received many offers for your property, but you've never sold - because this is your home!
Now the government is saying that they're going to create a slope on your property that would make it much less appealing to those potential buyers. Although you get to keep your house, your land is no longer as valuable. It's "highest and best use" has changed and you should be compensated for that.
Think Your Property Is Worth More Than the Government's Offer?
If you believe your property might be worth much more than what the government is offering you, the right appraisal can help build your case.
A condemning authority's attorney will probably not want to increase their offer just because you said your property is worth more, but they may have much more difficulty ignoring you if a professional appraiser says your property is worth more.