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Is the appraised value mentioned here after they condemned the property or the actual market value in 2000?

Hi, I'm a Real Estate Appraiser/Consultant in North Florida. I have lurked on FR for years, posted from time to time in the past. I just wanted to chime in here and give a little insight from my experiences.

I do a wide variety of work, and have done appraisal work in eminent domain cases for numerous counties and municipalities in North Florida. Let me be the first to say I do not agree with the use of ED in most cases for public use, and certainly do not agree with it for private use. I just want to be clear that I do not support ED, just that I have done work in the area.

Now, to the question. In Florida, for a government agency to use ED, they have to go to a hearing and prove neccessity. If the judge agrees, an order of eminent domain is granted. The value of the property is to be established as of the order of taking. This situation in New London is unique as we do not have that type of eminent domain here in Florida. That case took six years, and her property is certainly worth more now than it was in 2000.

As to "appraised value" or "market value". I have no idea what this figure is they have quoted. It could be anything from what the property was assessed for in 2000, to what the independent appraiser estimated its value was. A misnomer in this is that "the government" appraises your property. That is completely untrue. This work is bid out to appraisers, most of which have a professional designation. These people are not in the pocket of government 99% of the time. Every governmental agency that I have worked for has always said, "Give the property owner the benefit of the doubt". They do not want to go to court. Juries are very sympathetic to people who's homes, land or businesses are being taken against their will.

Now, given all of the "horror stories" people have heard about eminent domain, I don't expect many to believe what I am about to say. More time than not, the municipality is paying more than actual market value and the tax payers are the ones getting "screwed". Once again, I have no idea of how things work in New London, CT. and what the value was based upon. I suspect the value was established back in 2000. This went in front of a jury(note that eminent domain juries are the only jury other than a murder charge where there are 12) and juries - not the judge, not the government - determines compensation. Most likely, the jury decided to give her $442,155 because they were sympathetic and thats probably what her attorney and appraiser said the lot was worth "today", or in the recent past.

Now, there are numerous ways her property could have been unethically valued, to "low ball" her, but that is unlikely. Someone brought up the fact that she gets to keep the house. Well, she probably has to pay to move it, or that $445,155 figure incldued compensation for having it moved(very likely, no competent attorney would have not pushed for that). Given that this property had demand for re-development(I assume, given the developers plan), then one could argue that her lot possesses a "pro rata share" of the total value of the land which this developer is acquiring. That's probably how I would value it given the facts and information about the case that I have. The other method is simply based upon what the lot in and of itself is worth. Appraisal is based upon the concept of "Highest and Best Use", and while I don't have time to fully explain the concept, it implies that property is valued in a manner which results in the highest return. Let me give a quick example:

Say you own a 1,500 SF house on a 1/2 acre lot on a major roadway. Say in your area, similar 1,500 SF houses on 1/2 acre lots sell for $200,000. However, given that lots location on a main road, it probably has commercial use potential(and may even currently be zoned as such). So looking at recent sales of similar 1/2 acre commercial lots on busy roadways, I find that it should be worth $500K to $600K. Say demolition costs are $10K. As an appraiser, I don't say the house is worth $200,000, because continued use of the property as a residence when the underlying land is worth almost three times what the entire property as a residence is worth is not the Highest and Best Use. This is how this lady's property would have been valued.

One last note about eminent domain. You as the property owner have the legal right in every State to have another appraiser appraise your property. 99.99% of people who enter eminent domain proceedings do. This lady most likely did. The jury listens to both sides, and then determines compensnation. Juries typically do not understand appraisal practice or concept, are distrusting of government taking land and almost always side with the highest number, or at least in the middle.

Hope that clears some things up. I probably wont have time to respond today if anyone has another question, but I'll try to get back to you tomorrow or after Christmas.