Eminent Domain Questions

[Bocephus]

Hello All,

This is my first post so please be nice . I live just outside Asheville, NC and the state is going to take my house to widen a road. The Right of Way process starts in December so I am trying to do anything I can to get the most money out of my property. I want to hire an appraiser to come look at my home, give me his/her estimate for what it is worth and what I can do to get more out of it. I want this done without posting it publicly (not until I get all my ducks in a row). Is this legal and ethical? I would never ask anyone to do anything that is not ethical and I don't want to insult the local appraisers due to my lack of knowledge. Also, please shoot any info I might need to know about eminent domain and the appraising of my house.

Thank you all for your time,
Eddie

 

[Dan Umstead]

I think you are correct by doing your own due diligence. There is nothing unethical about that. Hire an appraiser and use the information to try to make sure you are made whole by the municipality.

 

[berniek]

This might be informative:
The Real Estate Acquisition Process Brochure

http://www.ncdot.gov/download/construction/roadbuilt/rightofway_acquisition_brochure.pdf

Google "The Uniform Act" for Federal right of way acquisition guidelines.

As the owner, you will be entitled to have an appraisal paid for by the buyer. Appraisals for eminent domain cost around $3,500 where I am. The acquiring agency will go over the process with you, you also will be entitled to relocation expenses.

 

[Bocephus]

Thank you

Thanks to both of you for the reply. I just want to make sure my homework is done and I am not asking someone to do something that isn't ethical.

 

[Eminent Domain]

If I have assumed correctly from your post the state will be acquiring your entire property {"state is going to take my house"}. This simplifies the entire process for everyone involved simply because there is no remainder left to value. If this is in fact the case then your primary concern is to do those things to your property to maximize its value.

If they are truly taking the entire property the just compensation is the market value as of the date of acquisition. To maximize its value you will have to decide if the improvements you make create more value than they cost. An appraiser or perhaps a realtor could help here.

All that being said retain a lawyer familiar with eminent domain process. The state typically does not want to go to court and will often negotiate based on what they believe the property is worth plus what it is expected to cost to take such an action to court. Depending upon the situation this range can be significant and result in a just compensation payment well above market value.

Being somewhat familiar with this process in the general area you have referred too, two things would tend to complicate the situation. First, is the human trait of greed. If you are expecting to receive double, triple or even more than that above what your property's market value is because it is your one time to the well or your opportunity to stick it to the man, then expect a fight. You will have to retain an attorney and most lawyers that work on this type of case require a 25% contingency fee of the amount above initial pay-in if settled during mediation and 33% if it goes to trial. They may very well also require an up front retainer depending upon how comfortable they are in the perceived or actual disparity of what the state has initially offered versus what an appraiser will say is the market value of the property. This of course is negotiable but when it comes to fees the law industry tends to be fairly rigid in their expectations, or so I have found in my experience. When the acquisition is the entire parcel it is relatively easy to establish market value unless it is an unusual property. As a result they are a little more willing to take a stand when they feel they are getting soaked.

Second, is if this is a partial acquisition. At this point the ballgame changes totally and no one can give you a case specific answer without knowing the situation at hand. As Berniek stated above $3,500 is a good starting point for a fee on a before and after appraisal that will likely escalate as the complexity of the situation at hand increases. Additionally in these types of situations other fees will include court preparation, seat time and travel billed at $150 per hour or more.

However, I would recommend this, if this is only a typical residential property a fee of $450 for an appraisal early in the process just to keep the state honest would be prudent. From there, if you can't settle early, the legal counsel you retain at that point can begin to direct the process.

Hopefully I have not rambled excessively and have provided a little insight on the subject at hand.

 

[berniek]

Excellent points ED.
One more point. When the buying agency makes an offer, their appraisal should accompany it. At which time you will receive instruction and be offered to obtain your own appraiser.
As was said by others, an early appraisal by you is not a bad idea, I'm just concerned that the comps might distort the value if there has too much time elapsed in between your and the buyers appraisals.

 

[Bocephus]

You Are Correct

If I have assumed correctly from your post the state will be acquiring your entire property {"state is going to take my house"}. This simplifies the entire process for everyone involved simply because there is no remainder left to value. If this is in fact the case then your primary concern is to do those things to your property to maximize its value.

If they are truly taking the entire property the just compensation is the market value as of the date of acquisition. To maximize its value you will have to decide if the improvements you make create more value than they cost. An appraiser or perhaps a realtor could help here.

All that being said retain a lawyer familiar with eminent domain process. The state typically does not want to go to court and will often negotiate based on what they believe the property is worth plus what it is expected to cost to take such an action to court. Depending upon the situation this range can be significant and result in a just compensation payment well above market value.

Being somewhat familiar with this process in the general area you have referred too, two things would tend to complicate the situation. First, is the human trait of greed. If you are expecting to receive double, triple or even more than that above what your property's market value is because it is your one time to the well or your opportunity to stick it to the man, then expect a fight. You will have to retain an attorney and most lawyers that work on this type of case require a 25% contingency fee of the amount above initial pay-in if settled during mediation and 33% if it goes to trial. They may very well also require an up front retainer depending upon how comfortable they are in the perceived or actual disparity of what the state has initially offered versus what an appraiser will say is the market value of the property. This of course is negotiable but when it comes to fees the law industry tends to be fairly rigid in their expectations, or so I have found in my experience. When the acquisition is the entire parcel it is relatively easy to establish market value unless it is an unusual property. As a result they are a little more willing to take a stand when they feel they are getting soaked.

Second, is if this is a partial acquisition. At this point the ballgame changes totally and no one can give you a case specific answer without knowing the situation at hand. As Berniek stated above $3,500 is a good starting point for a fee on a before and after appraisal that will likely escalate as the complexity of the situation at hand increases. Additionally in these types of situations other fees will include court preparation, seat time and travel billed at $150 per hour or more.

However, I would recommend this, if this is only a typical residential property a fee of $450 for an appraisal early in the process just to keep the state honest would be prudent. From there, if you can't settle early, the legal counsel you retain at that point can begin to direct the process.

Hopefully I have not rambled excessively and have provided a little insight on the subject at hand.

Mr. Domain,

Thank you so much for your response. You are correct in they are taking the entire property. My big concern is that I had applied for a home equity loan from somewhere out of state a couple years ago and they sent someone not from the area (and I wasn't ready on my end due to not knowing what an appraisal entailed) to come appraise the house. It was bad, about $20k under what I feel the house is worth.

I am not trying to get anything out of greed. I paid $290,000 for the house 7 years ago (brand new) and added at least $15,000 worth of upgrades to the property over the years. I honestly would like to see $290,000 back out of it. The state has assessed it as $303,000 for tax purposes until this year when they dropped it to $296,000.

I am worried because being in Western North Carolina in a large farm community there aren't many similar houses that sell to compare too. The lady that did the last appraisal said it had to be within 5 miles and it is nothing but farm land out here. She assessed it at $270,000 and now that is on the books and is why I am so worried. I am afraid they will see that and low ball the appraisal as well. I don't want to have to go to court over this, but will if I must.

If I have someone do an assessment for my own education purposes does that have to be on the books for everyone to see? Also Mr. Domain, I noticed you are from this area. Please send me a PM with your email if you are ok with that.

Thank you all for being so helpful.

 

[Mountain Man]

Keep in mind the initial price they offer is just that... an offer. If you are informed that gives you knowledge and a baseline of where to stand firm. However, I advise most folks to avoid going to court. Have seen only 1 seller actually win in court after all of the expenses and such.

 

[sail143]

To avoid confusion you should not refer to the appraisal values as assessments. The appraisal is an opinion of market value. Although mortgages are recorded, the appraisal is not. Therefore, your concern about "being on the books" is unfounded.

 

[Papoua Jose]

. I paid $290,000 for the house 7 years ago (brand new) and added at least $15,000 worth of upgrades to the property over the years. I honestly would like to see $290,000 back out of it. The state has assessed it as $303,000 for tax purposes until this year when they dropped it to $296,000.

I am worried because being in Western North Carolina in a large farm community there aren't many similar houses that sell to compare too. The lady that did the last appraisal said it had to be within 5 miles and it is nothing but farm land out here. She assessed it at $270,000 and now that is on the books and is why I am so worried.

[FONT=&quot]Seven years ago was the top of the market, pre-crash. WNC got hit hard and a lot of locations have yet to recover.[/FONT]