Appraisal basics
How a condemnation appraisal is produced
The sequence is not arbitrary. Each step constrains the next, which is why an error early in the process is so much more damaging than an error late in it.
Sequence
The eight steps, in the order they happen
Define the problem
Who the client is, what interest is being valued, the date of value, the definition of value that applies and the intended use of the report. In condemnation most of these are dictated by law rather than chosen.
Determine the larger parcel
What property is being valued as a unit. The test is unity of ownership, unity of use and contiguity. Drawing this boundary decides whether damage to adjoining land is inside the valuation or outside it.
Inspect the property
Physical inspection of the whole property and of the part being acquired, with photographs, measurements and notes on access, topography, improvements and anything that affects use.
Research the market and the legal constraints
Zoning, land use plans, deed restrictions, environmental limits, utility access and the record of comparable transactions. The constraints come first because they bound what uses are legally permissible.
Conclude highest and best use, before the taking
The use that is legally permissible, physically possible, financially feasible and maximally productive. This is the premise the entire before value rests on.
Value the whole property before the taking
Applying the sales comparison, cost or income approach, or a reconciliation of more than one, to the whole property as it stood.
Conclude highest and best use and value for the remainder
The remainder is a different property. It may be smaller, oddly shaped, harder to reach or closer to a road than it was. Its highest and best use may have changed, and it is valued as it will exist once the project is built.
Subtract, then itemise
Before value minus after value is the compensation. The appraiser then identifies how much of that difference is the value of the part taken and how much is severance damage, and whether any cost to cure applies.
What to ask at each stage
Where an owner can usefully intervene
At the inspection
Walk the property with the appraiser if permitted. Point out drainage, access routes, well and septic locations, easements and anything not visible from the road. An appraiser cannot value what nobody mentions.
On the larger parcel
If you own adjoining land used together with the parcel being taken, say so and explain how it is used as one operation. A narrow larger parcel quietly removes severance damages from the calculation.
On highest and best use
If the property had a realistic prospect of a different use, the evidence for it belongs in the record: zoning history, nearby approvals, enquiries from buyers, a pending application.
Timing
When the appraisal happens relative to everything else
The agency appraises before it makes an offer, because the offer is supposed to be based on an appraisal. The owner usually appraises after receiving the offer, which means the owner is reacting to a report rather than building one in parallel.
That ordering has a practical effect. By the time an owner obtains an independent appraisal, the agency has an established position and a file supporting it. The owner\u2019s appraiser is implicitly arguing against a completed document. A good independent appraisal therefore does two things: it reaches its own conclusion, and it explains precisely where and why it departs from the agency\u2019s.
Where the parties cannot agree, the matter proceeds to a commission hearing or a trial, and both appraisers testify. At that point the quality of the reasoning matters far more than the size of the number.
Get a valuation question answered
If an offer has arrived and the number does not match what you believe the property is worth, the appraisal behind it is the place to look. Start with the pages below.