Ramon Tate
Sophomore Member
- Joined
- Jan 30, 2005
- Professional Status
- Certified General Appraiser
- State
- Mississippi
I'm a staff appraiser with a State D.O.T. If the taking does occur, the appraisers doing the work for the acquiring agency, be it State or Federal, must comply with the provisions of Title III of the Uniform Act. Those appraisers are required to consider if there was any change in value that occured as a consequence of the project. Here's the applicable text from the Uniform Act:
[COLOR=blue]Section 301(2) "Any decrease or increase in the fair market value of real property prior to the date of valuation caused by the public improvement for which such property is acquired, or by the likelihood that the property would be acquired for such improvement, other than that due to physical deterioration within the reasonable control of the owner, will be disregarded in determining the compensation for the property. "
Practical application of this wording is most often made in the situation where announcement of the project will create a new high-value intersection on land that was formerly residential or agricultural. As it pertains to residential property that will stay residential, and any stigma associated with anticipation of the project, the practical reality, for all but the most densely populated areas, is that it is difficult to near impossible for any appraiser to extract any specific amount from sale pairings or other analysis and identify it as "stigma". In my own experience, I know that once a road project gets beyond the "concept" stage and the public recognizes that there is a real government committment for things to start happening in the "next few years", there are potential purchasers who will back off or shy away purely because of the uncertainty of what everything will look like, or whether the new right-of-way line will be 10 feet closer or 100 feet closer. Trying to attach a dollar figure or "stigma penalty" to a specific property based on things that even the road designers aren't certain of yet is an impossible task. In the absence of concrete road plans that show EXACTLY what will happen to the property you are appraising, it's the purest form of speculation. Always check with the responsible agency, State or Local, to see if specific construction and/or right-of-way plans have been prepared. If they have, you will need to see them and go from there. If not, just make note of what is known as FACT and leave it at that.
[COLOR=blue]Section 301(2) "Any decrease or increase in the fair market value of real property prior to the date of valuation caused by the public improvement for which such property is acquired, or by the likelihood that the property would be acquired for such improvement, other than that due to physical deterioration within the reasonable control of the owner, will be disregarded in determining the compensation for the property. "
Practical application of this wording is most often made in the situation where announcement of the project will create a new high-value intersection on land that was formerly residential or agricultural. As it pertains to residential property that will stay residential, and any stigma associated with anticipation of the project, the practical reality, for all but the most densely populated areas, is that it is difficult to near impossible for any appraiser to extract any specific amount from sale pairings or other analysis and identify it as "stigma". In my own experience, I know that once a road project gets beyond the "concept" stage and the public recognizes that there is a real government committment for things to start happening in the "next few years", there are potential purchasers who will back off or shy away purely because of the uncertainty of what everything will look like, or whether the new right-of-way line will be 10 feet closer or 100 feet closer. Trying to attach a dollar figure or "stigma penalty" to a specific property based on things that even the road designers aren't certain of yet is an impossible task. In the absence of concrete road plans that show EXACTLY what will happen to the property you are appraising, it's the purest form of speculation. Always check with the responsible agency, State or Local, to see if specific construction and/or right-of-way plans have been prepared. If they have, you will need to see them and go from there. If not, just make note of what is known as FACT and leave it at that.