Why North Carolina Eminent Domain Appraisals Are Different and How to Fight for More Compensation

One day, you’re building your life – your home, your business, your future. And then the North Carolina Department of Transportation (NCDOT) shows up with papers in hand and an offer for your land that doesn’t come close to what you think your property is worth.

It’s time to fight back – and fight smart.

With the right legal strategy, you can challenge the valuation, demand a fair appraisal, and push back against lowball tactics. You have rights. And you have options.

If you want to talk to an experienced condemnation attorney about how to protect your rights and fight for maximum compensation, call us today at 1-877-393-4990 for your free case evaluation.

“Just compensation” is not always just

You are entitled by law to just compensation for your taken property. In theory, “just compensation” means fair market value. But your property isn’t being listed for sale, it’s being taken. And the offer on the table isn’t a negotiation — it’s a declaration from the NCDOT.

Here’s the problem: once the state targets your property for a project, the market changes. Who wants to buy a home or business that’s about to be bulldozed or cut in half? Suddenly, the value may drop — not necessarily because your property is worth less, but because the threat of condemnation casts a shadow over everything.

What are “just compensation” and “fair market value?”

In eminent domain, just compensation is typically defined as the impact, or loss, to the fair market value of your property.

Fair market value is what someone would be willing to pay for your property on the open market, with no ulterior motives or abnormal conditions, with the assumption that both parties are well informed or advised and acting in their own best interests.

Appraisals and how value is determined in an eminent domain taking

An appraisal is the process of determining the value of a property. As you navigate the eminent domain process, here are three important factors to keep in mind:                                                                                                                 

1. An appraisal is not the same thing as a competitive market (CMA) analysis or a tax assessment.

• • A CMA, sometimes referred to as a broker price opinion, is an estimate prepared by a real estate broker or agent. It reflects a professional opinion of the probable sale price of a property based on comparable listings and recent sales, often expressed as a price range. While useful in private real estate transactions, a CMA is not a certified valuation and does not carry the same evidentiary weight in legal proceedings.

• A tax assessment, on the other hand, is conducted by a government assessor for the purpose of levying property taxes. These valuations are often outdated, generalized, or based on mass appraisal techniques. As such, they are rarely reflective of true market value and are not reliable indicators of what a property is actually worth in the context of a condemnation action.

2. Appraisers are licensed professionals, but they can have very different opinions.
   Appraisers are licensed and bound by the Uniform Standards of Professional Appraisal Practice (USPAP), using recognized valuation methods. Despite applying the same methodologies, appraisers may reach different conclusions due to the professional judgment involved in selecting comparables, adjusting values, and interpreting market data. In condemnation cases, these differences can significantly impact just compensation.

3. Not all appraisals (or appraisers) are equal.
   Appraisals in eminent domain matters differ significantly from standard valuations. They must address complex factors such as highest and best use, potential damages to remaining property, and adhere to state-specific guidelines. Experience in condemnation law is invaluable when selecting the right qualified appraiser; it’s about more than just their credentials.

How does an eminent domain appraisal work in North Carolina?

There are several phases in the eminent domain appraisal process, starting with a property inspection by the appraiser. Appraising a property is complicated and often the appraiser incorporates three main approaches to arrive at a value. Furthermore, in North Carolina, an eminent domain appraisal is typically a three-step process.

What are the three main valuation methods for eminent domain appraisals?

There are three approaches an appraiser can use to arrive at an eminent domain valuation.

• The Cost Approach: Estimates the value by calculating the cost to replace existing improvements, plus the land’s value
• The Sales Comparison Approach: Compares recent sales of similar properties; commonly used for residences but may be insufficient for complex takings
• The Income Approach: Values income-producing properties based on projected rental or investment income

An eminent domain appraiser might need to use all three approaches, depending on the property in question. Each has its particular requirements, formulas, and calculations.

Highest and best use – Determining the full value of your property

In eminent domain appraisals, highest and best use is a fundamental valuation principle. It reflects the most profitable, legally permissible, and physically possible use of the property as of the valuation date—even if that use differs from its current one.

Appraisers evaluate four criteria to determine this:

1. Physical Possibility – Is an alternative use feasible given the land’s size, shape, terrain, and infrastructure?
2. Legal Permissibility – Is the use allowed under zoning laws, deed restrictions, and applicable regulations?
3. Financial Feasibility – Would the proposed use yield a reasonable return on investment?
4. Maximum Productivity – Among feasible alternatives, which use delivers the highest economic value?

This analysis is critical in condemnation cases, as it can significantly increase just compensation beyond the property’s current use.

The three steps of an eminent domain appraisal in North Carolina

Eminent domain appraisers generally follow a three-step process in North Carolina:

STEP 1: State an opinion of the entire property’s value before any part is taken. The appraiser must evaluate the property’s value as if buyers have no knowledge of the pending project.

STEP 2: State an opinion of the value of the property remaining after the taking, including the land and improvements. The appraiser evaluates the property’s value as if the project were instantly completed, including any positive impacts.

STEP 3: Arrive at an opinion of the just compensation owed to the property owner. Subtract Step 2’s number from Step 1’s number (and adjust for any damages that may be non-compensable under state law).

As you can see, an appraiser isn’t simply arriving at one number. There are several different levels of analysis used. Each step contains a complex process, and appraisers are only human. They can make mistakes at any point in an appraisal. In North Carolina, the NCDOT doesn’t always have to share the full appraisal, and often only shares a Form 10-B “Summary Statement/Offer to Purchase Real Property.”

An experienced eminent domain attorney can help you obtain the appraisal, and we work to try to discover any future problems caused by the NCDOT’s taking. That’s why it’s imperative to have an advocate with knowledge of the process fighting for your best interests.

Common appraisal errors in eminent domain

Even licensed appraisers can make critical errors that impact valuation. Common issues include:

• Consideration of inappropriate comparables
• Failure to account for future development potential
• Overlooked zoning or setback violations
• Misidentification of highest and best use
• Omitted relevant data or market factors
• Errors in calculating damages or costs related to the taking
• Mathematical miscalculations
• Use of an unsuitable valuation approach

Such flaws can materially affect just compensation and should be closely scrutinized in any condemnation appraisal.

Should I tell the NCDOT how much I think my property is worth?

We do not advise that you share your opinion of your property’s value with a condemning agency like the NCDOT. You risk damaging your chances for more compensation down the road.

Let’s say the NCDOT comes and makes an offer for $100,000. You tell the right-of-way agent that you think your property is worth at least $150,000. They disagree, and you hire an attorney. The research and analyses from the attorney indicate your property is worth $300,000, but the right-of-way agent uses your own words against you. You could be stuck with half of what your property is worth in this example.

We advise you to disagree with the NCDOT’s offer and then let an experienced eminent domain attorney do the fighting for you! The original offer is the minimum you can receive, but it’s also the maximum if you accept it without fighting!

Can I challenge the appraised value of my property?

Yes, you can challenge the appraisal by declining the NCDOT’s offer and building a case for more compensation. This involves a few things you should be aware of:

• You generally have to file a response to the NCDOT’s condemnation lawsuit within 12 months, but in some cases, you may only have 120 days. If you don’t respond, you may lose your right to challenge the amount and fight for more compensation. Any time improvements – like buildings or parking lots – are taken, it’s vital to know if the money the NCDOT is offering is enough to pay for work you’ll need to do after the NCDOT is gone.
• You need the right professional analysis. An experienced eminent domain attorney knows which appraiser to call for a given property or circumstance. Perhaps a proposed driveway profile doesn’t work for you, or the road elevation will have a negative impact that’s not being considered. Hiring the right professional can make a significant difference in your case – and we’ve built a network of commercial and residential land experts across North Carolina that we can leverage for you.
• You may never get to see the NCDOT’s full appraisals of your property. Sometimes the DOT will perform multiple appraisals of a property and only use the one it believes is correct. Take note if the government has multiple appraisers out to your property. Regardless, your attorney will conduct their own analysis of the property to argue for more compensation on your behalf.

Should I hire my own eminent domain appraiser?

Most people do not have access to appraisers with significant eminent domain experience, so for most property owners it’s probably not in their best interests to hire their own eminent domain appraiser. Eminent domain appraisers should have deep knowledge of the area and its projects as well as experience testifying at trial and being cross-examined.

But do not worry. We’ll evaluate your case at no cost, and if we take your case, we’ll front the cost of the appraisal. If we can’t get you more than the NCDOT’s original offer, you pay nothing, including the appraisal cost. That’s part of our no-fee guarantee.

Can an eminent domain attorney help with the appraisal process?

Absolutely. We believe it’s wise to let your North Carolina eminent domain attorney handle the appraisal process entirely. Not only will it reduce your stress and time you invest, we know who to call and what aspects to focus on to seek maximum compensation on your behalf.

By hiring an eminent domain attorney, you’re delegating your critical eminent domain tasks to eminent domain professionals.

Eminent domain is all we do, and we only represent property owners

Some eminent domain attorneys in North Carolina may represent property owners or the NCDOT. It may make no difference to them. It does to us. We only represent property owners.

Get a free case evaluation

In our experience, the NCDOT’s first offer is too low. Your property may be worth much more! Since our firm started, we’ve been able to increase the DOT’s initial offer to our clients by an average of more than 195% – that’s nearly 3x more!¹

What are you really owed? Call 1-877-393-4990 now for help and answers!