Appraisal Tips

The short answer is that you should arrange for a free consultation with an eminent domain lawyer as soon as possible because if you received an appraisal from the government, eminent domain is very probably on the horizon. Most people have heard of appraisals, and may have had some experience with appraisals when buying or selling a house or business. Commonly appraisals are prepared when purchasing real estate, for example, when you are buying a home. However, there can be appraisals of all sorts of things such as jewelry, artwork, memorabilia or anything else where you need to figure out the value of something. In eminent domain, appraisals have an extra aspect: they are prepared to value the property that the government is taking and are intended to form a basis for the government’s determination of how much just compensation they are going to propose to pay you.

Appraisals are often an important part of the eminent domain process, however appraisals that are done too early in the process can often be inaccurate. The government is required under law to do at least one appraisal, but all too often the crust to appraise a lot of properties on a tight timeframe when the project is not even built yet is difficult at best. If you are facing an eminent domain situation, it is wise to consult with an eminent domain attorney before obtaining any appraisals beyond the one given to you by the government. Appraisals in an eminent domain situation often can be evidence that can be used in Court and as the old saying goes, “anything that you do or say can and will be used against you in the court of law!” Naturally there is a tendency to feel that one is involved in an extremely complex situation where the governmental agency or company wanting to take your land is vastly experienced. 

You are getting dragged into the situation, against your will, and without anything close to their level of experience. Below are some tips to help you when you are reading through an appraisal. This is good to do before hiring competent legal professionals to help you. This is designed to help you perform an initial read through of an appraisal given to you by the government so you can better understand what the appraisal says.

1) Property description. Check to make sure your property is fairly and accurately described. If it is your house, does the appraisal have the correct number of beds/baths? Do the pictures do it justice? Is the acreage accurate? It is a good idea to carefully look at how the appraisal describes the property. 

2) High and best use. What does the appraisal say is the property’s “highest and best use.” Put simply, the highest and best use is not what the property is being used for but rather what the property could be used for that would make the property most valuable in the marketplace whether or not the owner has any present plans to use the property in that way. A very common example of highest and best use is when there is a farm next to a residential development. While the property is currently being used for agricultural purposes, the highest and best use may be as residential development land. 

3) Comparable Properties. As part of the appraisal process, appraisers typically will try to find what they contend to be “comparable properties.” Since no two properties are exactly alike, the appraisers will try to find properties that are similar to your property and then compare them to your property. It is important to carefully consider the comparable properties, and look at how they compare to your property. How far away are they? Similar size? Similar # of beds/baths? Condition? Use? There can be some overlap between issues identified with 1 and 2 above that can influence the comparable properties. For example, if your property is not accurately described to start off, then it could mean that the comparable properties are not accurate. Similarly, if your property actually has a different highest and best use, this could mean that the wrong comparables were looked at.

4) Impact to your property. In the event only part of your property is being taken, it is very important to consider not only the part of the property you are losing, but also how your remaining property will be impacted by the loss of part of the property and the effect on the remaining property caused by the project that the land will be used for. The effects of losing part of the property coupled with the effects of the completed public project on the remaining property are termed “the taking” in Wisconsin eminent domain law. Sometimes, appraisers can overlook or not fully take into account how your property will be impacted particularly if they are trying to appraise the impact before the project is actually built. Sometimes this is because the appraiser doesn’t fully understand how your property is used or how the property will be after the project. As the owner of the property, you may be best equipped to figure out what the impact will be. When reading the appraisal, carefully look at the appraiser’s analysis with regards to the after condition of your property.

5) Second Opinion Appraisals. In some situations the government or company that is taking your land will send the landowner an appraisal and then offer to pay for a “second opinion” appraisal provided it is completed and turned over to them within 60 days. Although the government or company may make it sound like a requirement for the landowner to do this second opinion appraisal, it is actually not a requirement. In many situations it is a very bad idea to do this second opinion appraisal because if the project is not built yet it may be difficult or impossible to appraise the impact on your property. Just as it is very difficult to appraise a building that has not been built yet, in many situations it is difficult to appraise the impact of a project that has not been built yet. In the event that a government agency or corporation with the power of eminent domain sends you an appraisal and an offer to pay for a second appraisal within 60 days, call an eminent domain attorney immediately for a free consultation before deciding what to do. It is typically free and extra information and insight will be of great benefit to you.  

These are a few tips to keep in mind in relation to appraisals and eminent domain. Appraisals can often be an important part of the eminent domain process, but like anything in life the more carefully things are done the more accurate they tend to be. In our experience, the rush to complete appraisals before the project is even built is one of the leading causes of landowners feeling very unfairly treated in eminent domain proceedings. If you have any questions regarding this article or appraisals in general, please feel free to contact our office and we will arrange for you to speak with someone to answer any questions you may have.