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Opinion Of Value

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kelley brown

Freshman Member
Joined
Jun 12, 2003
The city where my company is located has requested an underground easement for drainage pipes running from the adjacent neighborhood, across a substantial area of our property, to the river on the far side of our property.

We are not sure what kind of transaction to expect, but my bosses want to get an idea of the kind of money involved in such an easement. It has been suggested that we obtain a "letter of opinion of value," rather than commission a full appraisal report. We are interested in comparable sales and the core valuation analysis, but do not plan to use this in any kind of eminent domain proceeding or subsequent trial over damages.

Have I described this lesser report properly? What is the difference between this kind of letter and a full appraisal report? Does our course of action sound sensible?

Thanks - Kelley
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Kelley,

The "letter of opinion of value" is typically not USPAP compliant and appraisers do not complete these anymore. Unless you are discussing a Limited Appraisal Restricted Use Report. The costs are dependent upon your area and what appraisers charge there.

Ryan
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Kelly,

Its all kind of relevant. For example If I owned 20 acres of land with a State 2 lane highway running right through the middle. Then plans for a 4 lane interstate were made to disect the property perpendicular to the state road to create a cloverleaf. The question is the same; What would be my damages? Well in my example I would give them the land.

Now change my example to say that a clover leaf would not be made. What would be my damages. Not sure but they would pay me something.

So in one example I make out like a bandit because of having four corner lots on an interstate. The other means I have all the noise, plus lost a large portion of my land.

Pay for an appraisal.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Ditto. A "value opinion letter" is from ages past, and is something that banks typically used for internal banking and lending purposes. It's not a product that an appraiser can provide without loosing their license. All appraisal reports must adhear to USPAP.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
They want your land for an easement which may significantly impact your utility and marketability. And your company wants to "poor boy" a valuation. You're going to get what you pay for. Anyone who issues a "letter of opinion" without conducting a full appraisal is not going to give you a true view of the market issues that may affect your property. If you decide not to accept the paltry sum the govt. will offer, you're going to have to get an appraisal for condemnation anyway.

Just go ahead and do it right.

Roger Strahan, SRA, IFA
 

Greg Brinkley

Freshman Member
Joined
Jun 11, 2003
I cannot give an opinion of the affect it will have on value without seeing the specifics, but I will say this. Under no circumstances should you allow the easement to run "across" your property. The very minimum you should allow is that they run it up the property line and you shouldn't care one bit how much more work or expense it is for them to do this. My parents had this same exact scenario on a piece of property they inherited. A developer wanted to run his sewer and water lines diagonally across the middle of the property. My father told him he must be crazy but that he could run them along the street and up the property line if he put in a 4 lane road that would give access to our property for the later purposes of selling it to a developer for a shopping center, hotel, or something similar. Since it was the only viable option the developer had, he complied and my father is now sitting on a goldmine property with new inquiries coming in every month.

Bottom line is fight it if they plan to dissect the property but offer to allow them to run it up your property line.
 
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