Another Reason Why Precondemnation Offers Are So Often Lowballs

Quotable quote:

   “The most important factor that affects appraisers preparing reports for governmental agencies is that the majority of assignments involve ‘projects’ that have multiple parcels. An example of this type of project is a road widening project that requires the acquisition of right-of-way from several parcels along a particular road. In these multiple parcel projects the initial appraisals are written with time and budget restraints. Appraisers who are hired by government agencies must submit a fee schedule that is competitive with other appraisers who are bidding on the project. The appraisal process and fees are part of the overall budget that the government agency has set in order to complete the project.

      “It is difficult for appraisers who accept these multiple parcel assignments to spend time and effort in preparing an effective initial report due to the fact that the fee allocated to each parcel reflects a bulk discount and the appraiser is not in a mindset that each report will end up being involved in a court proceeding. As appraisers we all know that an appraisal that is intended to assist in eminent domain proceedings can end up being involved in a court proceeding and we may have to provide expert testimony based on the initial report. However, we also realize that if a property owner does not accept the offer of just compensation based on the initial report and condemnation proceedings are filed, we will have the opportunity to complete another report knowing that this appraisal will have to stand up to cross examination and much more scrutiny.

     “I call the initial appraisal process involving a multiple parcel project, ‘Throw it against the wall and see what sticks.’ As appraisers we know that only a few private property owners want to take their cases to court.”  Keith Harper, MAI, Preparing an Effective Appraisal Report, Handout at CLE International Eminent Domain Program, Las Vegas, Mar. 18-19, 2004, at H1.