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Calculating Impaired Value

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DHF

Freshman Member
Joined
Jan 18, 2018
Professional Status
Banking/Mortgage Industry
State
Texas
I'm finding it nearly impossible to find an appraiser to appraise my home because of a unique situation. The home is located on 40 acres with river frontage. There is a dam on the section of river the property borders. TCEQ says the dam is not permitted, and the things they are requiring to permit it will cost $20K upfront and $50K annually (initially and increasing with inflation). I find it difficult to believe that this huge annual expense, which actually exceeds the PITI payment for the property, will have no impact on the market value, but the local appraisers have no idea what to do with it since there are no other sales to use as comps. Is there a way to calculate the impact of this nightmare on the market value?
 

BRCJR

Elite Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
remove the dam an option?
 

SpartanAG

Member
Joined
Feb 12, 2008
Professional Status
Certified General Appraiser
State
Arkansas
What happens if you don’t go through with the permitting process? Will the state fine the property owner into bankruptcy or simply take the property? $50,000+ a year is a pretty significant amount of money. Have you considered legal action to try and get the states decision reversed or amended? Why is the cost of permitting the damn dam so high?

I’d certainly be interested in more details. I’m always fascinated by these complex appraisal problems.
 

Rick Kulman

Junior Member
Joined
Jan 31, 2003
Professional Status
Certified General Appraiser
State
New Jersey
You need to get the name of an appraiser through an attorney who either specializes in condemnation (eminent domain) or property assessment appeals at the court level.

You may also want to discuss your “dam” situation with them as well.
 

DHF

Freshman Member
Joined
Jan 18, 2018
Professional Status
Banking/Mortgage Industry
State
Texas
What happens if you don’t go through with the permitting process? Will the state fine the property owner into bankruptcy or simply take the property? $50,000+ a year is a pretty significant amount of money. Have you considered legal action to try and get the states decision reversed or amended? Why is the cost of permitting the damn dam so high?

I’d certainly be interested in more details. I’m always fascinated by these complex appraisal problems.

Presumably they will move to a formal enforcement action and start fining us. Right now they are trying to get us to comply voluntarily, but to do so are requiring 300 acre feet of water per year be purchased and released to offset the evaporation and equipment be installed to monitor the inflow/outflow and balance them. The dam has been there since 1904, so removing it would release several 100K CU yds of polluted sediment into the water supply for .5 million people downstream as well as destroying the habitat for several threatened species. I don't envision the other agencies that would become involved granting a permit unless the whole thing was dredged first, which would run into the 7 figures. My property is on the tax rolls for a little over a $ million, so...

Without any comparable sales is there a way for an appraiser to determine the impaired value, or am I just wasting my time trying to find someone to do this?
 

DHF

Freshman Member
Joined
Jan 18, 2018
Professional Status
Banking/Mortgage Industry
State
Texas
You need to get the name of an appraiser through an attorney who either specializes in condemnation (eminent domain) or property assessment appeals at the court level.

You may also want to discuss your “dam” situation with them as well.

I've already discussed the "dam" situation with attorneys, and I have attorneys working on the property tax valuation dispute. We just can't find any appraisers qualified and willing to work with us.
 
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