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Just compensation is the difference between the fair market value of your property before the taking minus the fair market value of your property after the taking. How “fair market value” is determined is usually a matter of interpretation, and it is often at the center of legal disputes over eminent domain.
The Georgia Department of Transportation (GDOT), or another condemning authority, will commission an appraisal of your property to determine its value and the just compensation it thinks you deserve.
There are several reasons why the GDOT appraisal may not accurately reflect your property’s fair market value. In this article, I will explain in more detail what a condemnation appraisal is, how it is done, and what to watch out for.
What is a condemnation appraisal?
Real estate valuation is based on data and opinion. Two appraisers will seldom arrive at the same value. In our experience, GDOT’s appraisers often underestimate the highest and best use as well as the underlying value of the property.
How is a condemnation appraisal done?
Three common methods are used to determine fair market value. More than one approach may be used in a condemnation appraisal to reinforce the valuation conclusion.
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Sales Comparison Approach (also known as the Market Data Approach) – This method is mostly used to appraise standard residential properties. It compares recent sales of similar properties in the market area to determine a value accounting for specific differences, such as location, size, time, and access | |
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Income Approach (also known as the Income Capitalization Approach) – This method is used to value income-producing properties by deriving a valuation using the net operating income and an appropriate capitalization rate. | |
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Cost Approach – This method is typically used to evaluate special-use properties by determining the value of the land and adding the depreciated improvement value. |
An experienced eminent domain attorney can explain these methodologies in more detail and can help you understand if the appropriate approaches were used in your property’s appraisal.
Who is the condemnation appraiser?
The government hires condemnation appraisers to value your property. The appraiser works for the government, not for you. It may be in your best interest to have an independent appraiser value your property as well if you feel that the condemnation appraiser’s valuation is inaccurate. But getting your own appraisal without the guidance of a condemnation attorney can also hurt your case.
An experienced eminent domain attorney can help you determine if you need an independent appraisal and who to hire. At the GA Eminent Domain Law Firm, we work with a network of land experts to help us build our clients’ cases for maximum compensation. But there’s no need to worry about cost:
We advance all costs, including the cost of independent appraisals. We also guarantee that you’ll pay nothing if we don’t get you more than the government’s initial offer. Call 1-888-391-1339 today for a free case evaluation.
Will a condemnation appraiser give me a fair valuation?
Though eminent domain law states that it is the government’s responsibility to offer you fair market value for your property, it has been our experience that appraisers working for GDOT or other government agencies often arrive at valuations that are less than fair market value.
Like other buyers, the government wants to buy your property for as little as possible. In some cases, GDOT may start off with a below-market offer and slowly escalate its offers. Getting fair compensation for your property isn’t simple or easy. We believe it is in most property owners’ best interest to speak with an eminent domain attorney as soon as the government notifies you that your property is in the crosshairs.
What are the potential issues with an appraisal?
Appraisals play a pivotal role in the determination of fair compensation. Here are a few issues to look out for in the government’s condemnation appraisal of your property:
Remainder Property Valuation
If the government only wants to take part of your property, the appraisal needs to take into consideration any severance damage – damage to the “remainder” portion of your property – as well as the portion that is taken.
Here are two different theoretical examples and one real-life example of this:
- If GDOT takes the front 1 acre of a 10-acre property to build a highway, and also eliminates all access through that 1 acre, which was the only access to the property, the remaining property is left without access and has lost significant value. The appraisal should include the damages to the 9 acres caused by the denial of access, in addition to the 1 acre that was physically impacted.
- If the government takes 20 acres of a 100-acre farm for a project, it must pay the value for those 20 acres and should also pay for any damages done to the remaining land. Those 20 acres may have contained the water source for that farm, so losing those acres may mean the farm can no longer operate the way it did before. The GDOT appraisal should include the impact on the additional 80 acres.
- We represented a homeowner experiencing a road widening that would come significantly closer to the home. The land value offer was only $6,000. By demonstrating that the forecasted home value would decline following construction, we secured a $36,000 award for a minor impact taking.1 GDOT’s appraisers often do not acknowledge the effect of increased noise, traffic, safety, and pollution on a property and may even conclude that, save a small sliver of land acquired, the property value is the same as it was prior to the project.
Appraiser’s knowledge of the market
It is important to consider the highest and best use of your property before the taking, so the appraiser must fully comprehend what the market is for your land.
In most cases, people sell their property with the expectation of similar use – or put simply, a home will be sold to be used as a home, and a business as a business. However, if a home is on a prime piece of real estate, it may sell for much more to someone interested in using the land for a high-rise condo or an industrial plant. This would likely be the highest and best use of the property. This should also be included in your eminent domain appraisal.
Other issues often overlooked
Other mistakes or omissions commonly made in condemnation appraisals include:
- Incomplete explanation of the property’s uses
- Poorly chosen comparable sales
- Failure to include value for all improvements
- Failure to account for the value of fixtures or equipment
- Omission of important features or amenities (such as a beachfront location)
- Failure to calculate applicable severance damages
How can a condemnation lawyer help me?
The sooner you call us, the more ways we may be able to help. We’re led by four attorneys who formerly worked for a state Department of Transportation, so we have intimate knowledge of the processes and pitfalls of eminent domain.
Since our firm began, we’ve helped our clients increase their average initial offers by nearly 3x more.1
At the GA Eminent Domain Law Firm, we work on a contingency fee basis, so there are no upfront costs to hire us and no hourly fees.2 And that’s just the start of how we take on the financial burden for our clients.
We work with a wide network of land experts, including appraisers, realtors, environmentalists, surveyors, civil engineers, and land planners, so we know who to engage to value your property fairly. Our deep resources allow us to advance all the costs to fight your case. Best of all, we only collect a fee if we’re able to get you more than the government’s initial offer. Guaranteed.2
Call 1-888-391-1339 or contact us online as soon as possible for your free case evaluation.
