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depreciation due to pipeline through property

Discussion in 'Ask an Appraiser' started by Jeanief, Feb 20, 2007.

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  1. Jeanief

    Jeanief New Member

    0
    Feb 19, 2007
    Professional Status:
    General Public
    State:
    Minnesota
    Hi, I live in Farmington MN on 6 acres, and we now have a new oil pipeline that wants to come through our property. WE live in the middle of soy/corn fields and we are the only home in the area that it's going through. The rest is just fields. Koch has offered us a tiny amount of money. The pipeline will use about a 1/2 acre running through the front of our property. WE have a well and I am concerned about leaks. ( Oh yeah right, that doesn't ever happen...) also if we go to sell we will be the only home to have this on. They changed the route because the farmer doesn't want it running through their land because they will develope it in the future, so it went on to ours without notice . Thats another story. We will loose big mature trees and shrubs that procect us from the road. I am going to try to put together a offer by us that will pay for trees, easement for the line, and a " de-value" amount due to this easement. WE have tried to fight them but you can't fight Koch and win. The PUC has ok'd the route, so now I have to get my ducks in order. Right now is 1 home per 40 acres but that could change. WE can put driveways over the easement so that shouldn't hurt us. Does anyone have a idea of what % of the property value it could go down due to this line. Our property is worth about $500,000. There is a guy who is trying to sell his property, similar to ours, and no offers due to the pipeline !! People love the place but they find out about the pipeline and run. Our property is part of our retirement so I don't want to take a big hit when it's time to sell. I want Koch oil to pay for what I might be out when we sell. There has not been a pipeline through in 35 yrs so I don't have anything to compare to. I have heard 2-4% and up to 18% and have asked realtors but they have no idea. Any ideas so I can negotiate ? Thanks so much!!:)
     
  2. Mountain Man

    Mountain Man Elite Member

    30
    Jan 15, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Georgia
    Only a local appraiser who is familiar with condenmation appraisals can answer your question. Condemnations are a whole different ball game, and you need somone experienced... not just a regular appraiser.
    But one thing to keep in mind, the first offer is just that... an offer. They offer low because some will take it, so make a counter offer. Having done work for DOT, I'd try to stay out of court. From my personal experience, it's about 50/50 for owners to lose/win. If you lose, you will end up getting less than the last offer, and have to pay legal expenses.
     
  3. Jeanief

    Jeanief New Member

    0
    Feb 19, 2007
    Professional Status:
    General Public
    State:
    Minnesota
    Yes, I want to counter offer and would like to try to find out what a reasonable amount would be. I do feel that out property won't be as desireable due to this pipeline, but have no idea how much. I know it all depends on the market, but if there was on home for sale with a pipeline easment, and 1 without which one would you buy? See what I mean?? How much cheaper would my house have to be to make it equal to the ones with no pipleline? I might have to pony up and pay the $2000-$6,000 it costs in MN to get a appraisal like this, but just wanted to know if anyone had a idea.
     
    Last edited: Feb 20, 2007
  4. Caesargx

    Caesargx Guest

    The whole minus (-) the part taken equals (=) the remainder. It appears you are more concerned about the value of your property after the taking including some mixed emotions.

    You need a survey map of the right-of-way taking, (called the part taken)...

    Are you sure it isn't just a temporary construction easement?

    After the taking, you will know more about your property's worth when considering damages that were involved, if any.

    You would be surprised how many residential uses are in close proximity to right of way eaements, such as pipe lines.

    Sincerely,
    Benji
     
  5. Caesargx

    Caesargx Guest

    Part taken minus (-) the Whole equals (=) the remainder. (I am correcting my self)

    Sincerely,
    Benji
     
  6. xmrdfghap

    xmrdfghap Senior Member

    0
    Jan 15, 2002
    Professional Status:
    General Public
    State:
    Florida
    I don't know Minnesota laws or procedures, but contact your Department of Transportation for a GOOD appraiser and attorney. Most states provide for payment of both by the state. YOU NEED BOTH!!!!!!!!

    I have no idea what kind of pipeline they are putting in, but it is a hazard ( 12 Dead in Carlsbad ), there is significant stigma to the property, It does long term damage to land productivity, and results in a significant reduction in your ability to use your land.

    Check with the IRWA for appraisers and attorneys in your area.

    Of course Koch is going to try to pay a pittance....they are not generous with their money and they want to make it as profitable as possible, but they need to pay not just the current "fair market" for the land, they need to pay for the stigma attached to the balance of the land, and loss of future income from the land. Get professional assistance today....I would suggest yesterday, but it was a holiday.

    From the article linked to above, Published in 2000:
    From the same article:
    Get help NOW!
     
    Last edited: Feb 20, 2007
  7. Caesargx

    Caesargx Guest

    One more thing: The courts do not always rely on just one Appraisal by one Appraiser. So if there is a counter offer, it wouldn't hurt to have your own Appraiser.

    ...And if for some reason this is a before and after valuation, the cost approach may be reliable if there is no market for your property. If I a not mistaken, the courts look at each approach to value individually. I am sure there will be a land unit comparison.

    Try to have a title search done and consider all rights.

    Sincerely,
    Benji
     
  8. Caesargx

    Caesargx Guest

    """I have no idea what kind of pipeline they are putting in, but it is a hazard ( 12 Dead in Carlsbad ), there is significant stigma to the property, It does long term damage to land productivity, and results in a significant reduction in your ability to use your land. """ ~Posted by Mr. Good Pasture


    Sometimes that is the case. I would definitely hire an Attorney too, like the Mr. Goodpasture suggested. If it were me, I would have my Attorney ask for a before and after Evaluation/Valution and then have an extensive study of highest and best use (before and after).

    Sincerely,
    Benji
     
  9. Jeanief

    Jeanief New Member

    0
    Feb 19, 2007
    Professional Status:
    General Public
    State:
    Minnesota
    WE do have a attorney and many are taking this case to applet court. I am not going to because I don't feel we could win against Koch. I just talked to 1 appraiser that told me that in Blaine MN it's common place tp have a pipeline and the property values are the same with and without. 1 other time the owner got $10,000 per acre. There has not been a pipeline built in 33 yrs on MN , so it's really hard to compare. 1 buyer might love my property and not care, and another might freak out, and not want the chance that oil and poison could explode in their front yard or leak into the well water. I have to try to figure out #1 what the stigma/ concern of a pipeline worth due to being the only house with this pipeline? #2 They are taking out mature trees and shrubs that block the view of our house from the road ( that I can't replant ) so it won't looks as nice. Whats that worth? That is my main problem right now. They are paying 10% per acre and figure our land is worth $5,875. for the easement. That might be fine for farm land , but we are residental 6 acres and pay taxes for residental. I can do a price comparison to land and figure out what my land is worth and 10 % of that. Thats all Koch wants to pay for. I strongly feel that my land will be less desireable if this pipeline is on it due to danger, easement, not being about to plant more trees etc. This is a permanent easement and they could run another line in the future if they wanted. They also have a temp easement for their work area. The first offer was $5,875 for 405 x 50 wide ( .47 ACRES). Then Koch appraisers came and gave a verbal of $28,000 to my son. We were not home and have not heard for them again. If anyone had appraised a property with a before and after value ( pipleline, electric high wires) I would love to hear! OR just a guess . Would a buyer buy it if it was 5% less, 10% less, 20%? I just don't want to loose my butt selling it because nobody want a house with a pipeline on it. Thanks again to all that have posted! Jeanie
     
  10. Mountain Man

    Mountain Man Elite Member

    30
    Jan 15, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Georgia
    I hope that wasn't an appraiser, that sounds like a negotiator. Figuring the value of a temporary easement is not as simple as pulling a number from the air. For road takings, we have full damage studies that have taken years to build for valuing proximity damages, utility damages, and value of temporary easements. And yes, landscaping and mature trees are considered and paid for if included in the taking. Like Greg said, you need to hire your own counsel in your state.
     
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