In a time of alarmingly rapid increases in home prices, when people are paying thousands more than the asking price, sight unseen, your due diligence takes on even more importance.
One of the most crucial pieces of information a home shopper needs to know is what the state or local governments are planning as far as roadway construction. New and/or wider roadways, changed traffic patterns, etc., could turn what you think is your dream home with the right size, right price, right location, etc., into a nightmare. If a condemning authority like the North Carolina Department of Transportation, or your local municipality, decides to undertake work on the road where you live or the surrounding roads, all of that due diligence may become moot.
There are compounding effects from this type of government action. It could be something relatively inconvenient, like adding five minutes to your commute to and from work. It could include safety issues such as a roadway being widened and coming closer to your backyard where your young children play. In extreme cases, it could even be the acquisition of that dream home you only recently moved into.
Real estate agents on both the buyer and seller side are obligated to reveal to a potential buyer any material fact that might affect a buyer’s decision to purchase. That includes any announced road construction projects that could affect the property. Despite this affirmative obligation, some brokers may not know about a project, or may not reveal what they do know. It is vital that buyers do their own homework, or at the very least, ask the question.
“Are there any planned government or road projects that might affect this property?”
You should be able to find information yourself on road projects being planned from any condemning authority, though if you’re working with a broker, it’s something they should do on your behalf. Most condemning authorities will list upcoming projects on their website; some do not. A few quick questions and a little bit of research can save a lot stress in the future.
What If the Government Is Taking Your Home as Part of a Roadway Project?
You’ve finally got your home after dealing with all of the headaches of the current real estate market. Time to relax, except a new project is announced and your property is in its path. Did you endure all of that stress just to lose your home?
Take a breath. It is relatively uncommon for a condemning authority to take an entire home. Usually they are taking some of the land and leaving the home untouched, which does not mean unaffected. The amount of land the government is acquiring could impact the home value if, for instance, the new roadway is being moved closer to the home. It could also mean the home no longer conforms to prescribed setbacks or other rules.
If the home is being acquired or is remaining but will be detrimentally affected by the land taking, the government will hire an appraiser to value your home. This is where you need to pay close attention to the comparable home values the condemnor uses to place a value on your property.
Two of the many criteria we use in evaluating comparable sales are 1) what houses are selling for at the moment, and 2) when was the subject property valued? We often review eminent domain appraisals that have used sales from 2-3 years in the past as comparable sales to the property in question. Currently, we are seeing appraisals that were done before or early on during this current run up on housing prices. A home that was valued at $400,000 in 2019 can be worth $500,000 or more now.
If the Government Comes for Your Property, Don’t Get Mad – Get Representation
A government acquisition of all or a portion of your property, including your family home, is not something you want to handle on your own. The condemning authority wants to keep their project moving forward and like any buyer, they want the property for as little money as possible. In other words, they may not have your fair treatment as their top priority.
The government has almost unlimited resources, and we should know. Four of our attorneys previously worked for the NCDOT, and now use that experience working for the “other side” to help owners fight for the just compensation they deserve. In all, our attorneys have more than 80 years of combined experience evaluating appraisals and fighting for fair values.
You probably fought to get that home. When it comes to the government, leave the fighting to us. Hopefully you won’t be in the market for a new home again any time soon.