TX DOT, Eminent Domain, and property owner/CPA

[Jimmie West]

The TxDOT intends that we be in dire straits time wise. It would be impossible to anticipate the utterly flawed nature of the land appraisal and damage assessment. In addition, until the appraisal is in hand, one can't know the exact specs of the land to be acquired. It's rural here, perhaps I've been wrong not to try and locate an CG out of the Houston area. I'll see what/whom I can find tomorrow morning, maybe there's someone out there without a problem with the timeline to get this done. I have done I'd say pretty good work and analysis, and the prob around here is the county isn't part of the MLS, so I've had to go to one of the local appraisers for current comps, they just will not take on the task with the risk of fighting the state, and actually I doubt they are CG's.

Thanks for your advice.

For Stephen.........Size adjustments were made for $400 per acre downward for two of the three comps that were 10 to 13 acres in size. The 3rd comp was a 42 acre tract, and the appraiser made no size adjustment for this one. The Size adjustments were premised on the total acreage of the parent tract (about 47) rather than the 2.65 being acquired by the state. Further, the frontage being acquired by the state is the only viable frontage for this tract, it being bisected in it's entirety, paralell with the Highway, by a vast ravine. Literally, there is no remaining adequate and safe entry, for which no damages were provided, much less additional level terrain suitable for sale as frontage property.

 

[Pamela Crowley (Florida)]

Bump.......

 

[Fred]

Jimmie
I understand what you are saying - except I would need map to understand the bisecting part. By the way you state it, it sounds like the appraisal overlooks too many relevant characteristics of the property appraised.

I have done a number of assignments working for the property owner. The reviewers at the condemnation agencies end up telling the department not to hire me because I won't kowtow to their pressure. It is an ordeal. In my opinion, you need a lawyer in the short run more than you need an appraiser. In my expericence, unless you can get the court to stop the project, you have no chance of even getting their attention; and until the judge tells them so, they are not going to back off their appraisal. You have to weigh all of this against ending up like those people you on TV, who spent $500k contesting a $100k shortfall, and who are taking it to the Supreme Court next.

In the meantime, I did a search of Texas state government manuals and fournd this.
ftp://ftp.dot.state.tx.us/pub/txdot-info/gsd/manuals/apr.pdf

 

[PamPearsall]

You have time!

Jimmie,
I believe either way the state will condemn your property and take it…

However, if you disagree regarding compensation on said land; they will put the amount they believe they owe you into trust and you will get an appraiser and a lawyer and fight it…the whole thing goes to court the jury decides how much you will get for the land they took; After your case is presented the states' case is presented. (Don’t be surprised it’s been my experience that the jury usually takes the states' number and your appraisers' number and you get something in the middle).

Appraisers usually jump at these cases…I make great money on these cases…lets say for something like you state I usually make about $3,000 for the appraisal then I make another $200 an hour for testifying with a 2 hour minimum…to prepare (so if you settle after I prepared and I don’t end up testifying…I still get $400.

Lawyer makes good money too. Of course if you win the jury can award you (and they typically do) all costs.

Now, here might be what is happening and if it is; you need to pay particular attention because you don’t want to waist your money. The appraiser for the state might have done a good job; the methodology that you explain sounds correct to me…and I do a lot of Right of Way appraisals. If he did a good job no other appraiser wants to come in for you; push value knowing that they will have to go to court and be ripped apart and look foolish and loose credibility in their community; perhaps face a Board Complaint. No appraiser wants to take your money and come up with the same number or close to the number as the original appraiser either; so if they think that the first appraiser did a good job they will just refuse your job.

Right of Way appraisals are different animal then residential appraisals…if you insists on doing a rebuttal yourself take a class on Right of Way or get a book. You do have plenty of time all you need to understand is that they are going to take your property…you just refuse to accept the amount that they offer to pay and hire an attorney…resolution will take somewhere up to 2 years (probably no longer).

I can not state this strong enough…your rebuttal to the appraisal will not win you the amount you want…(not if you don’t know what your talking about and you won’t unless you get some education in Right of Way appraisals) I have seen it many times and you will just be spinning your wheels your experience with real-estate and accounting does not give you the background you will need…I promise.

 

[Jimmie West]

In the meantime, I did a search of Texas state government manuals and fournd this.
ftp://ftp.dot.state.tx.us/pub/txdot-...anuals/apr.pdf

Steven, thanks so much for this link, I've been reviewing it through the morning. The form used on this property was ROW-A-6, and it would appear that the actual parcel acreage being acquired should have been used as the basis for comp sales analysis. Actually, it looks as well like they should have used the approach defined by ROW A-5. Anyway, many thanks, and I did speak with an appraiser this morning, and while he doesn't do DOT work he referred me to an MAI who does, but warned that it would be costly, wish I knew how potentially costly. Thanks again, Jimmie

 

[Jimmie West]

". . .the methodology that you explain sounds correct to me…and I do a lot of Right of Way appraisals."

Pam,

How exactly is it logical for an appraiser to downward adjust the price per acre of comp sales of 3x larger size than the parcel under valuation. How exactly is it logical for the appraiser to use the full acreage of the parent tract for purposes of his valuation of "the part to be acquired"? Having read through the instruct for ROW A-6 this morning, I see nothing to indicate the parent tract was appropriately used as the subject property for purposes of valuation analysis.

Thanks, Jimmie

 

[Roy Courtney]

Jimmie:
If the TXDOT provided you with a copy of the appraisal be sure to check the type of license the TXDOT appraiser has. In our area I have become aware that TXDOT sometimes use a certified residential appraiser instead of a certified general. This type of appraisal can include temporary construction easements, slope and drainage easements and partial takings. I belive these would be considered complex assignments requiring a general. If they have made this mistake it should work in your best interests. Good Luck!

 

[CANative]

Mr. West,

Thank you for posting/sharing your interesting appraisal problem. This type of problem is over my head and out of my geographical area, but I do have some obervations and questions.

Why is highway frontage for large tract, rural properties so valuable? Is this some sort of Interstate highway? Is there commercial potential beause of the zoning?

Unless the lot is very deep, it doesn't seem like 2.5 (+-) acres could be very useful as it is a narrow strip between between the frontage and the ravine. The taking just makes the strip narrower.

Is this more of a problem with the remainder portion having frontage inferior to other properties which the the DOT is taking? If so, the situation may be fair because it's not the fault of the DOT that there is a ravine which separates the highway from the rest of your land.

Can you get them to build a bridge as part of the negotiations?

Also, from what my walnut size brain can understand, Texas goes by the State Rule rather than the Federal Rule. The forumula for just compensation under the Federal Rule is Before and After. With the State Rule the forumula is Taking Plus Damages. Did the appraisal under review use the proper methodology so that just compensation could be determined?

 

[Fred]

Pam,
I have to disagree about taking a course. Here is what he posted.

there is no remaining adequate and safe entry, for which no damages were provided

Sounds to me like he grasps damages to the remainder just fine. Also, I just glanced at the table of contents knowing what I was looking for and on page 3-3 it says this.

"The authorities for Appraisal and Appraisal Review Standards and Requirements are found in State and Federal Laws, TXDOT Appraisal and Review Manual, Uniform Appraisal Standards for Federal Land Acquisition (UASFLA) and Uniform Appraisal Standards for Professional Appraisal Practice (USPAP). With the exception of State and Federal Laws and differences between the above authorities, it is the intention of 49 CFR 24.103(a)(a) that the appraisal and appraisal review standards be consistent as much as possible with the requirements of USPAP."​

UASFLA is the known as the Yellow Book and is also free on line.
http://www.usdoj.gov/enrd/land-ack/​

Everything you would learn in a condemnation class is already in the agency guidelines. Just like USPAP document itself already contains all of USPAP and I never learn anything in those classes either.​

Also, I think you are way understating the appraisal fees necessary. I usually rack more like 40-60 billable hours preparing for trial and getting rid of the other side’s report before we get there. Try low five figures. It’s hard to imagine anyone worth hiring is available for less.

How exactly is it logical for an appraiser to downward adjust the price per acre of comp sales of 3x larger size than the parcel under valuation. How exactly is it logical for the appraiser to use the full acreage of the parent tract for purposes of his valuation of "the part to be acquired"?

Jimmie, you mentioned the adjustment a few times. If that is size adjustment and it is in the wrong direction, to the degree the amount of the adjustment is reasonable, then it seems the appraiser has missed his own opinion by $800/acre.

I mentioned something to before. And now that I see the state manual has all these reference to the federal guidelines. That leads me to believe you are in a jurisdiction where compensation can be found by substracting before-after. It is not actually the value of the part taken by itself, but the contributory value of the part taken that is compensable. So, it may not be that they are using the value of the large parent tract for the small part taken, even if it appears that way at first glance.

Since you have an appraiser now, I will leave you in his hands.

 

[Fred]

The forumula for just compensation under the Federal Rule is Before and After. With the State Rule the forumula is Taking Plus Damages. Did the appraisal under review use the proper methodology so that just compensation could be determined?

Greg, That is an oversimplifcation and common misconception. There is no one state rule. Ever state and territory has its own rule. They fall into various categories. Some states are the same as the feds.