Calculating Fair Market Value in Eminent Domain

In most cases, it is difficult to persuade a court to stop the eminent domain process in the first place. Courts often give a broad interpretation of the term “public use” that allows the government to take your property.

More controversies arise from the amount of compensation that the government offers you for your property. While they are required to pay you “fair market value,” there is often a stark difference of opinion as to what the term means. If the government is trying to take your property, you need legal help today. Contact our firm to discuss your case with a South Carolina eminent domain attorney.

How Fair Market Value Is Defined in Eminent Domain

The general definition of fair market value is:

“the price which property will bring when offered by a willing seller to a willing buyer, neither being obligated to buy or sell.”

Fair market value attempts to simulate the price that two knowledgeable parties, who are negotiating for the sale of land, would reach. However, the government often takes this consideration out of the picture. They try to dictate to you what you should accept for your property. Although the government may have the right to take your property, they do not get to dictate the price.

Three Ways that Fair Market Value Is Assessed

Several methodologies are used to assign a valuation to your property:

The market approach

The market approach uses sales of comparable properties in the area to value yours. This approach is difficult to use because it is not easy to determine what property may be exactly comparable. As the landowner, you could get shortchanged because the appraiser is using a comp that is not an exact match, and the property is worth less.

The income approach

The income approach is sometimes used when the property produces income for the owner.

This methodology will analyze the future expected cash flows from the property and assign a multiple. However, the income approach would be not helpful when your personal property is being taken.

The cost approach

The cost approach values how much you would need to spend to replace the land and what was on it. Both the actual land and the structure would be valued. This valuation method only applies to replacement cost and not the actual cost to build the structures. The cost approach is often used when the property has unique features that do not lend for easy comparison to other properties.

The government must even give you the benefit of the doubt when valuing your property. They must assign the value that reflects the “highest and best use” of your property, and not necessarily the use right now.

Fair Market Value for Your Property Is Often in Dispute

The first possible area of dispute is in the method chosen by the appraiser to value your property. Another of the three methodologies can lead to a higher valuation of your property.

Then, the government’s appraisal could reach a starkly different result from what you may think is the value.

The government does not get the final say about what your property is worth. If you do not agree with their valuation, you can challenge them in court. You have the right to present your own evidence, and the court could determine the value of your property. Owners have far more success when they challenge the government in valuation matters.

Hire Your Own Eminent Domain Appraiser to Learn Fair Market Value

You should work with your own appraiser to come up with what you believe is the fair market value of the property. You may even try to obtain valuations using several of the methods.

When you take your case to court, you could be challenging one or both of the following:

  • The valuation method that the government is using for your property
  • The actual valuation number that they reached after applying their chosen method

The government’s proposed payment is for your property, which is very near and dear to you. You may know in your heart that the government is offering you too little for your property.

Hiring an appraiser to value the property can give you more evidence that you are being paid too little. However, it is not easy to take on the government on your own. The government has its own experts and lawyers, whose job it is to make sure that you are paid as little as possible.

In the end, the final valuation of your property is up to the jury if you and the government cannot agree. You need an attorney of your own to argue your case in court. The government can and does push property owners around who do not push back. Hiring a lawyer is your way of pushing back.

How an Eminent Domain Attorney Helps You

An eminent domain attorney can do the following for you:

  • Review the taking itself to help determine whether you can argue that it is not for “public use.”
  • Work with appraisers to value your property who would then testify at your trial
  • Negotiate with the government to obtain a higher payment for your property — most eminent domain valuation challenges end up in a settlement agreement before the case reaches the jury
  • Present the case to the jury if you cannot reach an agreement

Eminent domain cases often involve technical details of property valuation that an attorney is best qualified to flesh out in court. You need detailed arguments that would explain why the government is not paying you enough for the property. These trials end up involving technical aspects of real estate valuation.

Contact a South Carolina Eminent Domain Attorney Today

For legal help with your eminent domain case, contact West Law Firm Personal Injury Lawyers today. We will explain how eminent domain appraisals can be used to your advantage in your case. You should contact an attorney as soon as you learn that the government intends to take your property. To schedule an appointment with an attorney, you can message us through our website or call us today at 843-483-8630.

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